All good things..
All good things come to those who wait? Well, regardless of which proverbs you live your life by, it is arguable that this statement no longer applies to the insurance sector as the trend for moving on continues.
It seems that the pressure is on more than ever to continually move providers seeking to drive down the price of personal insurance products. Advertising for comparison platforms is more driven than ever before. There are doubtless, thousands or hundreds of thousands of policy holders that renew with the same provider, the reality still remains that the market is very formidable in its approach to tempting clients to switch.
With many of the other products we buy in life, we find a “routine” and we stick to it, each of us has a shortlist of favourite haunts for our clothes, food and gadgets. Does the same apply to financial products? If not, why not?
The difference is clear, each of the other products are purely for consumption purposes, providing us with a unit of the mystical measure of economic satisfaction the boffins call “utility”. In layman terms, this means that they are things we enjoy buying.
Insurance products are designed to indemnify the buyer, in the event that a given event or occurrence takes place. The dreaded claim! Contrary to popular belief, insurers don’t really mind claims at all, in fact, without them, they wouldn’t have a job! It is the job of an insurance company to ensure their premiums represent the likelihood any given punter will claim plus the costs and margins they need to survive.
Sticking around:
As a consumer, you may not derive much pleasure from buying insurance (in fact one might be shocked if you did!), but sticking around when it comes to renewal has real benefits.
Firstly, insurance relies on participation to ensure the products and prices are adequate. If you stick with your insurer you can help shape the service you want. That is certainly the approach we are taking. The longer a client remains with us, the more satisfied we want them to be.
Secondly, isn’t it better to build a relationship of trust? Home insurance may seem trivial when you aren’t claiming, but what happens when the chips are down? We worked hard to get to know our customers in their first year- if we have done our job, they should like us. Get to know your insurer, ask questions of them, our UK call centre is manned by very friendly normal people (not robots or automatons!).
If you are a valued customer then within reason, your preferred insurance brand should be willing to keep you with them. We freeze our premiums for renewal; this is a gesture to show that by joining us, we want you to stay with us. We won’t risk losing you by hiking up the prices, without you having claimed.
Lastly, I shall use an analogy which I think is quite poignant. If you have ever moved jobs, you’ll no doubt have a lovely CV. Any prospective employer is in a position to judge your loyalty and worthiness of a job by your previous record. If you haven’t stayed in a job longer than six months or a year, they may regard you as a weaker applicant and you’ll not be front of line to work with them.
There is a danger of this happening in insurance. After all, an insurer only has a finite amount of capital to risk by insuring consumers, if they change their client acquisition strategies in the future, higher prices might be charged to those that they worry will just take their security and move.
Keep one eye on the future!
At present, prices in the insurance sector are still competitive and falling. This is of course brilliant for the consumer. Home insurance shoppers should be aware however, that insurance is a long term strategy.
Perhaps consider how you view the purchase of the product (your utility), if you don’t claim, do you worry that you wasted your money? Well, to be honest, you shouldn’t. We buy insurance “just in case”, so really the fact you haven’t claimed is a good thing for you. You didn’t have to go through any hurt (the cause of the claim) and you can focus on getting on with life. Insurance should really be owned and only heard in response when “help” is cried.
Think about what makes you loyal to the other brands you buy from, look for the qualities you demand in your insurance brand. Do they exhibit behaviour that reflects your values? Do they want to get to know you, or just get you on the books? It’s a serious product, so perhaps its worth joining a brand that keeps their service serious?
If you stick with the same insurer for a long time, then claim, they might be able to view your account from a different perspective. Your loyalty could help you save money, where otherwise a premium rise would be high; your insurer might be more helpful because they are confident you will stay with them.
The better your insurer and account manager knows you, the better job they can do and the smoother the renewal process goes. At insurance4everyone, we have specific products we have put online, but our team can source products from a number of providers. Think of us as a confectionery store that stocks more than just one brand of chocolate bar.
Choice is great and with that choice, you can position yourself near the price you want to pay.
You pay for what you get!
As with everything in life, you pay for what you get. With insurance, your price is sensitive to two distinct factors. The security of the insurer and the conditions they place on the promise to help you when things go wrong.
If you buy a really cheap product it might be that your insurer is actually a bit weaker financially than its competitors, the risk of them going bankrupt or not being able to afford a deluge of claims is greater. By taking that price, you agree you are willing to accept that risk.
A lesser price might also mean, less is covered, I think this is the second post in as many days where I have said that all insurance products should be read thoroughly. Seriously though, I can’t say it enough.
So next time you look to change insurers, pick one that you can see yourself sticking with and run a quick test- “if I don’t claim, would I still value the service these guys provided?”.
As always, our lines our open to chat and help you on your insurance products, we cant wait to hear from you.
James*
Marketing& Branding
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