• Nearly six in ten (59%) South Africans shopped around for a better car insurance deal in the first six months of 2024
• Cheaper premiums and better coverage were the leading reasons that consumers switched car insurers
• Consumers are less likely to switch their homeowner’s insurance policy, although those who move mostly do so for a better price
Under-pressure South Africans are shopping around for the best deals for car- and homeowners insurance, with 59% saying that they had shopped around for better car insurance in the last six months, and 41% saying that they intended to do so in the next six months, according to the first TransUnion South Africa Insurance Trends Survey.*
The survey found that more than half (55%) of respondents switched car insurance providers once they had shopped around, highlighting a vulnerability for insurers. Cheaper premiums were the leading reason for switching (41%), with this trend being most pronounced among 59% of 46-75-year-olds, indicating a strong cost-sensitivity among this group.
However, nearly one quarter (23%) of respondents switched providers because their new insurer offered better coverage, reflecting a significant demand for more comprehensive insurance options, while 15% switched for anticipated better customer service.
Loyalty was the primary reason 24% of respondents chose not to switch car insurance providers, particularly among 46–55-year-olds where the rate was 38%. This indicates a strong sense of brand allegiance within this age group, likely due to long-term relationships and satisfaction with their providers.
Additionally, 21% of respondents stayed with their existing providers because of lowered premiums, suggesting competitive pricing strategies effectively retain customers. This is particularly noteworthy in the highly price-sensitive car insurance market.
“These insights highlight the critical areas that insurers must focus on if they are to attract new policyholders, and to retain their existing customer base,” said Schalk Fischer, Insurance Vertical Sales Leader at TransUnion Africa. “Competitive pricing, comprehensive coverage, and exceptional customer service are consumers’ leading priorities, and insurers can help them overcome their current financial pressures by seizing the opportunity to engage with them through innovative, tailored products. These could include flexible offerings such as usage-based insurance, which could help address financial strains and prevent insurance gaps that expose consumers to risk.”
The method of obtaining car insurance quotes varied significantly among surveyed consumers, and customer service/call centres emerged as the preferred channel with 46% of respondents choosing to speak to a consultant. Interestingly, this method was particularly favoured by older adults aged 66–75, with a notable 53% preference rate among this demographic, emphasizing a preference for personalised assistance and guidance in insurance matters.
Insurance company websites were also a popular choice: 44% of respondents reported using this method.
Websites were most popular among younger adults aged 25–35 where the adoption rate soared to 53%, reflecting their comfort with digital platforms for managing insurance needs and seeking information independently.
Comparative quote websites were the next most popular choice at 41%, with 43% of people aged 25–45 preferring these platforms. This demographic’s preference suggests a shift toward online offerings that facilitate comparison shopping for car insurance policies and offer transparency and ease in comparing insurance policies. It highlights a growing preference for digital convenience when shopping for insurance.
Policyholders slightly less likely to switch their homeowners’ policy
Survey respondents who shopped around for homeowner’s insurance were less likely to switch providers than those who shopped for a new car insurance provider. More than half (57%) chose to stay with their incumbent insurer, likely due to being satisfied with their current coverage, or reluctance to navigate the complexities of switching.
Of the 43% who switched providers, the primary motivation was the pursuit of cheaper premiums, as cited by 37% of respondents across all age groups, although 31% of switchers prioritised obtaining better coverage, suggesting a preference for policies that offer comprehensive protection and peace of mind.
Among those consumers shopping for an alternative homeowner’s insurance provider, 45% favoured customer service call centres, suggesting a significant reliance on direct communication and assistance, and a preference for personalised service and advice. Comparative quote websites were the preferred avenue for 43% of respondents, with these likely to be more tech-savvy consumers, while 42% (particularly 25-55-year-olds) used insurance company websites or mobile apps, underscoring a demand for accessibility an ease of use.
With similar-size groups showing preferences for diverse platforms, it’s clear that insurers need to offer diverse channels and personalised approaches in the homeowners insurance market.
“The cost-of-living crisis is reshaping consumer spending habits and significantly affecting the insurance
sector in South Africa, and rising insurance premiums during these periods have led many customers to worry about their abilities to continue making payments,” said Fischer. “To manage escalating expenses during inflationary and low-growth periods, insurers often raise premiums, which can further reduce policyholders’ spending power. Consequently, consumers with already tight budgets may scale back on non-essential insurance coverage or switch to providers with lower premiums. Insurers must balance necessary price increases with the risk of losing customers, carefully managing premium adjustments to mitigate customer attrition.”
*TransUnion’s Insurance Trends Survey is an online survey conducted from 7 to 15 May 2024 among
1,000 South African respondents 25+ years old, screened for ownership of vehicle insurance (current or in the six months prior to the survey), and who have shared or sole insurance decision-making responsibilities. TransUnion partnered with a third-party research provider, Dynata, using an online research panel method across a combination of desktop, mobile and tablet devices. These research results are unweighted and statistically significant at a 95% confidence level within ±3.1 percentage points based on a calculated error margin for a sample size of 1,000. Please note some chart percentages may not add up to 100% due to rounding or multiple answers being accepted.
TransUnion Insurance-Trends-Q2-2024-South Africa-Report...
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