Towards the end of the insurance year, usually in November, drivers receive a letter from their motor insurer. In these annual contribution letters, among other things, the contribution for the coming insurance year and the change in the no-claims class are communicated. According to a study by the research and consulting company Sirius Campus, however, it is precisely these annual contribution letters that trigger the specific desire of not a few customers to change their car insurance.
Specifically, last December 1,792 decision-makers were surveyed about motor vehicle insurance in private households. In eight percent of them, the letters would have triggered a specific thought to change. What sounds like a small proportion, extrapolated to the approximately 40 million motor vehicle policyholders in Germany, corresponds to around three million customers. These in turn are likely to make up a large proportion of those who ultimately actually change their car insurance. “This means there is still considerable potential for customer loyalty in the context of letter communication with customers,” believes Dr. Oliver Gaedeke, Managing Director at Sirius Campus.
But what aspects of the letters are driving drivers into terminating their existing contracts? First of all, the authors of the study explain that in most cases the thoughts on switching are related to a downgrade of the SF class. Explaining these in an understandable way is the crux of the matter. “Only a good reason for an increase in premiums reduces the intention to switch,” so the conclusion.
Two thirds less willing to change
Building on these results, Sirius Campus tested five different letter variants with customers willing to switch. One variant was able to reduce the inclination to switch by 65 percent. Important aspects: An individual approach, for example taking up the previous claim as well as the specific offer of cheaper tariff alternatives. Combined with the contact offer of a specific personal mediator, the intention to switch could best be reduced.
If not already implemented, intermediaries could also use this knowledge for their own customer letters. If they have customers of motor vehicle insurers in their portfolio whose annual contribution letters do not yet take this knowledge into account, intermediaries could send information to their customers in parallel with the letters: with the offer to contact him or her first if anything is unclear.
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