Research firm GlobalData says move will help the insurer retain customers and market-leading GWP share
Admiral’s decision to offer a £25 refund to its motor policyholders will set a precedent for other insurers in the UK that will help the company to retain its customers, according to GlobalData.
GlobalData said that while the refund may seem insignificant to some, costing the motor insurer £110m, the highly competitive nature of the motor insurance market means this move will improve the company’s customer satisfaction.
With the lockdown measures in place, the volume of traffic on the UK roads has fallen dramatically in recent weeks. As a result, the industry expects to see a considerable fall in the number of claims made, allowing providers to refund a portion of premiums.
Daniel Pearce, senior insurance analyst at GlobalData, said Admiral’s decision moved it in line with leading insurers in other regions.
“Motor insurance providers in the UK have been under growing pressure to refund policyholders in a move that would bring them in line with those operating in other countries, such as Liberty Mutual and Allstate in the US,” he said. “The move to refund premiums will undoubtedly set a precedent for other leading players, who will want to ensure that policyholders remain loyal to their brand. Given this, it should be expected that other providers will follow suit, but the situation is not straightforward.
“Many providers will be facing an uncertain future given their exposure to other lines of business, where the number of claims has increased following the COVID-19 outbreak and the economic impact is yet to unfold.”
Research from YouGov has found that the move has already proved to be successful, with YouGov BrandIndex data showing that this gesture of consideration during the coronavirus crisis has gone a long way with customers.
YouGov’s Buzz scores (a net measure of whether consumers have heard anything positive or negative about the brand in the last fortnight) for the insurer increased by 10.5 points, while Reputation scores (whether someone would be proud or embarrassed to work for a brand) increased 2.4 points.
Admiral is already seen favourably compared to other insurers as the eighth most popular insurance brand among Britons, according to YouGov research.
YouGov data also shows, however, that from the week before announcing the refund to the week after, Admiral moved from fourth to third best performing insurer for public impression.
Unsurprisingly, the refund increased Admiral’s satisfaction scores among those who are already customers by 13.9 points in just four days.
Word of Mouth Exposure scores (whether someone has talked about the brand with friends and family in the last two weeks) for this group increased by 30 points alongside a 25.9 point increase in Attention scores (whether someone has heard anything about a brand, positive or negative, in the past two weeks).