Premium increases lead consumers to shop around

More and more consumers are flocking to switch insurance providers as premium price rises take their toll, according to industry experts Consumer Intelligence.

The company's official analysis, which is used by the Office of National Statistics to calculate Consumer and Retail Price Indexes, highlights a 5.4% hike in motor insurance premiums over the last 12 months. But that's not all. Over the same period home insurance premiums have also risen, by a similarly startling 5.8%. So what's the story?

"Our data reveals that insurance prices are rising substantially faster than the Government's consumer inflation rate of 3.3%. And they're also overtaking the broader Retail Price Index (RPI), which currently sits at 4.4%", says Consumer Intelligence's Managing Director, Ian Hughes.

Further Consumer Intelligence research has uncovered a simultaneous fall in people planning to renew with their existing motor insurance provider, down from 29% to 25.8% since this time last year. Home insurance customers are also feeling the pinch, with just 28.2% of buyers claiming loyalty as compared to 36.3% 12 months ago.

"These results show that at the same time as insurance companies are trying to improve their margins, consumers are busy tightening their belts, the result is that consumers loyalty is falling" comments Hughes.