Insurance Report February 2016

Transcription

1 Insurance Report February 2016

2 Executive Summary The evidence is in and it s overwhelming. Most over-50s are paying more than they should for their insurance, and many are not even aware they re being taken advantage of. This report is based on de-identified data provided by the first 38,104 over-50s who joined the MA50+ campaign conducted by the FiftyUp Club, Today and Macquarie Radio. The national average annual Car Insurance premium reported by registrants was $719. The national average annual Home and Contents Insurance premium reported by registrants was $1284. A combined annual average of $2003 is a significant spend for many FiftyUps. At the time of going to press, this represents an estimated $76.3 million in annual premiums up for grabs for insurers who make an offer to the campaign. Independent actuarial analysis by Finity Consulting commissioned by FiftyUp Club shows average car insurance premiums halve from age 30 to age 65, because older drivers are better risks. But just 6% of respondents said their premiums have got cheaper as they ve got older, showing FiftyUps aren t being offered or taking advantage of the cheaper premiums. About 1 in 5 have never changed car or home insurance providers, indicating high levels of loyalty that may be sometimes misplaced. Of those who have switched car insurers before, 75% have ended up saving, with half saving over $100. The survey shows why FiftyUps are better risks, with one in three having never made a claim on either their car or home and contents insurance, and more than half not having made a claim for over four years. Most concerning is that FiftyUps have discounts available to them in the market now, but less than half are receiving a discount and 1 in 3 didn t even know they were available. They re certainly feeling the pinch. Over half of all registrants would drop their cover altogether if car or home and contents premiums were to rise by 20%. It s clear the MA50+ campaign is needed for FiftyUps. Not only are these FiftyUps paying more than they should, they re suffering because of it. The campaign hopes to get them the discounted insurance offers they deserve.

3 Part 1 What over 50s are paying for home & car insurance Overall, have your car and home insurance premiums gone down as you ve grown older? Just 6% have seen their premiums go down as they ve got older The last time you changed home or car insurers, did you save? More than 1 in 5 have never moved providers. But of those who HAVE switched before, 75% have ended up saving. Over half of those happy switchers saved over $100 on their insurance premium.

4 Why have you never changed? (choose up to 3 reasons) Confusion is the biggest barrier for people who haven t switched before with 73% saying It s too hard to compare prices/policies or they re afraid of making a bad decision. Fun Fact: Thankfully just 3% of registrants have had an under-25 crash their car. However, that stat won t give much consolation to the 556 FiftyUps who have had it happen to them!

5 Part 2 What over 50s are paying for home & car insurance Do you currently receive a discount from your home insurer? Only 1 in 3 FiftyUps are receiving a discount on their home insurance. 43% of those who saved, saved over $100 annually on their home and contents insurance When your home insurance last came up for renewal, did you: Three in five FiftyUps just paid the premium in their renewal notice last time they received it.

6 When was the last time you made a claim? Nearly half of all registrants have never made a claim. Less than 1 in 10 registrants have made a claim in the past year More than half of all registrants who have claimed haven t made a claim in the past five years. What sacrifices have you made to afford your home insurance? 1 in 5 registrants have sacrificed levels of cover to afford their premiums 1 in 10 have used their credit card or borrowed against their mortgage to be able to afford it.

7 How much would your premium have to rise for you to drop or downgrade your home and contents insurance? Over half of all registrants would drop or downgrade their cover completely if there was a price rise of 20%. But 1 in 4 registrants would never drop their cover.

8 Part 3 Car Insurance Do you currently receive a discount on your car insurance premium? Less than half of all car insurance premium holders are receiving a discount on their premiums. Amazingly, nearly one in three don t know whether they are or not. Has a driver aged under 25 ever crashed your car? Just 3% of registrants have had an under-25 crash their car. (Still, that s 556 crashes ).

9 When was the last time you made a claim? One third of over 50s have never made a car insurance claim. More than half of all registrants haven t made a claim in over 4 years. When your car cover last came up for renewal, did you: More than half of all registrants just pay the premium on their renewal notice without comparing.

10 What sacrifices have you made to afford car insurance premiums? Three in every 5 registrants have had to make sacrifices to afford their car insurance. How much would your premium have to rise for you to drop or downgrade your car insurance policy? 57% of registrants would drop their cover if premiums were to rise as little as 20%

11 About This Report This report on FiftyUps and their car and home and contents insurance policies is based on de-identified data provided by the first 38,104 registrants of the MA50+ campaign. MA50+ is a campaign to use the buying power of 20,000+ FiftyUps to negotiate exclusively discounted car and home and contents insurance offers for over-50s. As part of the registration process, consumers answered a series of optional questions to assist the FiftyUp Club in its attempt to negotiate a collective discount. In this report, we have tried to digest, analyse and present our members data to them so that they can see as simply as possible the issues facing many FiftyUps across Australia. Why the FiftyUp Club? The FiftyUp Club is built upon a simple belief that FiftyUps are, more often than not, the best customers that companies can hope for. They are often lower risk, higher value, and stick with providers they like and respect. FiftyUps are a huge section of the market, (1 in 3 Australians are 50 or over) with a serious amount of buying power, (about 50% of household buying power) but despite all these strengths, they often feel ignored by corporate Australia. The Australian Human Rights Commission recently found that many FiftyUps experience what the AHRC calls product invisibility, which they define as FiftyUps being overlooked by corporate Australia. (Sources: Australian Bureau of Statistics; Mi9 Reports; The Australian Human Rights Commission.)