How do Consumers Choose their Motor Insurance Policy?

The motor insurance market is changing, and consumers are faced with an increasing number of brands, with varying prices and offers, to choose from. The growth of aggregators within the market has made it easier for consumers to compare many brands at once, making it ever more important for brands to present a competitive proposition.

But in such a cluttered market how exactly do customers choose between brands?

To answer this question for our motor insurance clients we used our Proposition Optimiser tool, putting together a piece of tailored conjoint analysis research. The aim of the project was to reveal what attributes drive customer decisions when they are choosing where to purchase motor insurance from.

Respondents were asked to choose one option from a number of options presented to them, based on the four attributes we looked at: Brand, Price, Value and Offers.

Our research found that whilst all four attributes played a part in driving consumer choice, brand and price had the largest role to play.

Within the brand attribute we tested a number of well-known names in the insurance market. Although this is the most important attribute for consumers, it is the hardest for brands to adjust. This is because consumers have well-formed opinions on brands that cannot easily be changed. Factors such as heritage also play into this which is again out of the brands control. However increasing the marketing budget brand awareness can be improved, which may help performance in this attribute.

Within the price attribute we tested a number price propositions. We found that phrasing can have a huge effect on price-level attractiveness - guaranteed savings win over potential savings claims.

The work also revealed some useful learnings around what offers perform best. We found that the offers that included freebies that were not insurance related were the highest performing, although only when the brand of the freebie was stated.

By implementing learning from this research our client was able to increase policy sales, with the introduction of a freebie offer proving to be particularly effective.