Home policyholders are waking up to the fact that savings can be made by shopping around Jonathan Russell reports.

The golden rule of personal lines, that home customers are loyal while motor customer are fickle, could be about to break.

Research from market analyst Consumer Intelligence is pointing to radical change in the most conservative of personal lines markets, home and contents.

What the survey shows is that consumers are starting to wake up to the savings they can make by switching insurance providers. Up to 50%, are ready to do just that.

The key point the study reveals is that consumers are becoming more fickle about where they want to put their business and what it would take them to change.

Consumer Intelligence managing director Ian Hughes says: "Over the past 12 months there has been virtually no change in the number of people who say they are going to shop around at renewal - about 66% of the population.

"The most dramatic change is that the number of people prepared to switch from one provider to another for just £20 has increased from 3% to 15%."

Hughes draws a parallel between the home market today and the motor market 15 years ago.

He claims that the dynamics in place will lead to consumers taking more interest in what price they are paying and where they are buying their home insurance from.

He says: "Our analysis is that the home market has reached the critical mass point, where companies will have to start reviewing the pricing and channels to market."

Consumer Intelligence reached its conclusions by comparing attitudes among 5,000 consumers over a 12-month period.

The company said the number of consumers citing price as important to their choice of insurer had jumped from 65% to 79% over the year.

Hughes claims that this change in attitude by consumers, together with different marketing models, will favour the direct writers at the expense of the traditional bank and mortgage insurers.

He says: "With more and more consumers choosing to switch their home insurer, we anticipate exponential growth in the home insurance market for companies that are selling direct.

"Within 10 years the majority of consumers will be shopping around for their home insurance as they do with motor insurers, rather than buying from the easiest place."

The theory is backed up by figures showing that the majority of major mortgage lenders lost market share over the past 12 months.

Lloyds TSB, NatWest, Abbey, and Halifax fell away, leaving only Nationwide and Barclays to gain ground.

The biggest winners in 2004 were direct players like esure and Direct Line.

Hughes says: "It is clear that the sands have started to shift underneath the home insurers and the next 12 months will see major opportunities for market share to be won or lost.

"Traditional insurers will need to look at their entire product marketing strategy to ensure that the way they price, market, sell and service their customers is optimised.

"This comes at the same time as many companies are worrying about the implications of ICOB (the FSA's rules on conduct of business).

"Clearly the winners will be those companies who manage to balance the issues of the market with those of the regulator. Those who withdraw into their shells and spend too much energy on compliance could find their customer bases eroded permanently."