Around 9.4m general insurance policies, or nearly one in five (19.1%), were subject to review in the 12 months to March 2019, according to a report by market research firm Roy Morgan

The General Insurance Industry Market Overview Currency Report says that the 9.4m general insurance policies comprised policies that were switched to another insurer and those that were renewed with the same company after approaching other companies.

Companies with the most loyal customers (in terms of the percentage who renew without looking around) are CGU and RACV; ahead of RACQ, CBA, Apia and Suncorp.

Most general insurance policies renewed automatically

Over the last year, more than three quarters (78.4%) of general insurance policies were renewed with the same company without approaching any other companies. This was an increase from the previous year when it was 77.5% and currently represents 38.3m policies.

Major variations in general insurance company loyalty

The most loyal customers, based on the proportion of policies that are renewed without the holder approaching another company, are with CGU (85.8%) and the RACV (83.5%). Both of these companies are well above the industry average of 78.4%. The least loyal customers among the majors are with YOUI (only 70.6% renewed without looking around), AAMI (73.3%) and GIO (73.7%).

Mr Norman Morris, industry communications director of Roy Morgan, said, “Although the clear majority of general insurance policies are automatically renewed with the same company, there are risks and opportunities as a result of around one in five policies being subject to review at renewal time.

The number of policies being considered for change over the last 12 months was 9.4m, an increase from 8.3m from five years ago. The number of general insurance policies actually being changed to a different insurer over the last year was 2.1m, down from 2.7m in 2014. It appears that more people are looking around at renewal time but fewer are actually switching.

“To maximise the marketing opportunities presented by the large number of switchers and considerers it is important to understand why policyholders move or at least look around. Our research shows that general insurance policy holders primarily say that they change companies or shop around due to issues relating to better premiums. Our understanding of why people shop around goes well beyond cost and looks at other issues that motivate them, such as bad claims experience, purchase of a new car, poor customer service, better product elsewhere and recommendation by a family member or friend, etc.”