Price comparison websites are preparing for battle as an increasingly competitive home insurance
market is forcing down prices, providing web-savvy customers with the opportunity to snap up cut price deals.
Research by Consumer Intelligence (CI) has found that home insurance customers are becoming more price conscious which in turn is likely to cause a price war for price comparison websites later this year.
A survey of 2,000 home insurance buyers, conducted monthly by Consumer Intelligence has seen a ten per cent increase in price sensitivity in recent months, the biggest rise since the study began 18 months ago.
Ian Hughes, CI’s Managing Director, explains the reasons behind the leap: "Consumers long ago woke up to the fact that they can save serious money on their motor insurance by switching providers. It was only a matter of time before they applied the same principle to home insurance. Recent mortgage and energy cost increases have seen home owners looking to offset these rises. Reducing home insurance premiums is a quick and easy way of saving money."
Currently, around 69 per cent of motor insurance
customers use price comparison websites when they renew their policies, this is could be in part due to the increase in motor insurance premiums witnessed in 2007 which rose at double the rate of inflation. However, during the same period, home insurance premiums fell steadily before creeping up again last month.
While car insurance shoppers are making full use of comparison sites, only 43 per cent of people seeking home insurance bothered with a price comparison site when renewing their policy. However, if these people decide to start comparing quotes, that would mean an additional 5.5 million more shoppers on price comparison sites in the next few years.
Mr Hughes continues: "Up until recently consumers have been very slow to realise the benefits of switching home insurance providers. Partly because of traditional prejudices towards mortgage lenders, not to mention the overall cost if there’s a cataclysmic claim. But continuing economic uncertainty is encouraging them to move fast - in increasing numbers - to take advantage of the significant discounts on offer."
Recent discounts offered to customers by insurance firms have reduced annual premiums for many by up to 50 per cent, allowing consumers to get more value for money than ever before. Consumer Intelligence is advising consumers to take advantage: "Get out there and sniff out the best deals… you could save yourself a great deal of money! Things are just about to take off for home insurance price comparison sites. Provided the pricing, marketing and service delivery is right, they can expect rich pickings in 2008," adds Hughes.
© Fair Investment Company Ltd