Let's be very clear about what is happening here...

66% of customers buy car/home insurance through comparison sites which encourage price as the only or near only basis for comparison.

To be successful with new business, insurers have to write the year 1 policy at a loss/breakeven - "New customers only" pricing. Therefore, private motor insurance has mainly been written at a  loss for the last 25 years,

With a 66% churn rate and most of the policy set up costs being in year 1, the overall costs for all policyholders across the market goes up. 

The result is that policyholders pay the price in subsequent years - the "loyalty tax"

What would happen if insurers broke the vicious cycle and started to examine how to increase retention through a massive focus on behavioural insight, realtime analytics and decisioning, AI, proactive and even preemptive retention activity and "segment of one" personalisation?

I saw how the teleco industry adopted just this approach some years ago and the results were startling. Massively reduced churn, optimisation of customer retention for the best customers and a bottom line effect that could not be ignored in the P&L reports hitting the board room table.

Very soon a major insurer will adopt this in their mainstream operations and the rest will have to follow.

Perhaps then we can get away from this vicious circle of bad behaviour which destroys the industry's good name.