Given the competitive nature of the motor insurance market, Admiral’s plans to refund motor insurance policyholders will set a precedent for other insurers in the UK looking for ways to keep customers loyal.
GlobalData’s 2019 UK Insurance Consumer Survey indicates that Admiral is the leading provider of private motor insurance policies, accounting for 12.8% of the market. Refunding policyholders £25 of their premium may seem insignificant to some, but the highly competitive nature of the motor insurance market, which saw 30% of customers switch provider in 2019, means this move will improve Admiral’s customer satisfaction and help retain customers.
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With lockdown measures in place, the volume of traffic on 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. 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.
With Admiral being one of the leading insurance providers in the UK, 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 COVID-19 and the economic impact is yet to unfold.
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