Consumer advocates Compare the Market have backed calls for insurance companies and banks to stop hiking premiums and prices for loyal customers, while offering better discounts for new customers.
Compare the Market is also calling on all insurers and banks to put their products on comparison sites, to make it easier for Australians to transparently look for a better deal.
It comes as a class action has been launched against some of Australia’s most well-known insurers, where it’s been alleged that they’ve used computer algorithms to inflate premiums for existing, loyal customers. There are also warnings that similar practices are running rampant in the banking and insurance industries.
Compare the Market’s Economic Director David Koch said enough was enough when it comes to the reported loyalty tax in the insurance and banking industries.
“It’s no secret that loyal customers are often the ones stung with higher fees and frankly, it needs to stop,” Mr Koch said.
“Time and time again, we are hearing from customers that their loyalty doesn’t pay.
“Australians put their trust in big brands and are often shocked when they use comparison services like Compare the Market and discover just how much we can help them save by switching to a different insurance provider. In some cases, Australians aren’t even aware that they’ve been paying a higher premium by sticking with the same brand or plan.
“The savings by switching to a better deal can often be hundreds of dollars over a year, which can make a significant difference as we continue to battle the cost-of-living crisis.
“According to ABS data, insurance costs have skyrocketed a whopping 16.4% in the 12 months before March alone. It’s the biggest increase since 2001, so quite alarming.
“While it’s great to see the issue finally getting some attention, urgent action is needed to make up for slow progress over the past couple of years. At the end of the day, our message is the same as it always has been – compare your bills and insurance renewals as soon as they come through. It doesn’t matter where you go to compare, but really put your bills under the microscope.
“There’s a significant difference reported between what new customers and old customers pay and right now not enough is being done to help those people onto better deals.”
While the onus is on Australians to search for a better deal, Mr Koch said insurance companies and banks need to do more.
“A big issue we see is a resistance from some brands to allow their products to be compared transparently against others on the market,” Mr Koch said.
“It’s certainly a worry and we regularly advocate for all insurance companies and banks to allow for easy comparison.
“However, we want it to be as easy as possible for Australians to ensure they’re not paying a cent more than they need to for these important services. Whether it’s joining comparison websites or automatically rolling customers onto cheaper products and plans, it’s fair to say that more needs to be done to make the process an easier option for Australians.
“Right now, the decision to switch and save ultimately lies with Australians,” Mr Koch said.
“Complacency kills your hip pocket and people need to be more sceptical about their bills and make sure they’re not paying more than they need to.
“I’d urge anyone who’s been with the same bank, insurer or telco for the past few years to be a bit inquisitive, do some research, and see if you’re actually getting a good deal. If after comparing you find that you’re already on the best deal, you have peace of mind knowing you’re not paying a cent more than you need to.”
For more information, please contact:
Phillip Portman | 0437 384 471 | [email protected]
Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.
