Despite calls from some for the practice to be banned, dual pricing is a fairly common feature in Ireland’s insurance market, with some more susceptible to the practice than others, according to the latest survey findings.
In July we reported on the Central Bank wrapping up its investigation into dual pricing in Ireland’s car and home insurance market, particularly the practice of price walking.
The CBI’s third and final report announced its intentions to ban the price walking but it stopped short of banning dual pricing.
This comes as new research shows that more than half of people have experienced dual pricing in the Irish insurance market, with women less aware of it than men.
The survey, commissioned by the insurance provider Peopl.ie, also shed some light into just how susceptible consumers potentially are to being taken advantage of by pricing practices.
However, before we get into the findings, here’s a reminder of the difference between dual pricing and price walking.
Dual pricing and price walking
The practice of dual pricing occurs when an insurer charges loyal customers a higher premium than new customers, despite having similar risk profiles.
Price walking on the other hand is a form of dual pricing and is where loyal customers end up getting charged more each year upon renewal. This is often referred to as a loyalty premium.
A total of 6 in 10 people (58%) in Ireland have experienced the practice of dual pricing across a number of insurance products in the Irish market.
This is according to the latest nationwide survey of 1,000 people commissioned by Peopl.ie, a provider of home, travel and life insurance.
However, a further 24% of respondents claimed they didn’t know what dual pricing was, and according to Peopl Insurance, could very well mean they have “unknowingly fallen foul of it” before without being aware.
Discussing the results of the survey, Paul Walsh, CEO of Peopl Insurance said:
“Our survey really shines a light on just how many people are affected by dual pricing – a practice which, at the very least, is a questionable way of pricing insurance. Insurance is a product that is needed in pretty much every household throughout the country, so the way it is priced will impact hundreds of thousands of people. This makes the need for fair practice even greater.
The fact that the Central Bank is clamping down on the issue is to be welcomed - the industry and regulators need to work together to ensure fair and equal treatment of all consumers.”
Discrepancy among men & women
The survey, conducted by iReach, also interestingly highlights that more men than women are likely to experience dual pricing with 66% of men saying they have experienced the practice, versus 51% of women.
However, 30% of women surveyed said they were completely unaware of the practice, signalling that women may actually be more at risk of overpaying for insurance products.
More women than men also indicate that they don’t understand what dual pricing actually is - 29% versus 18% respectively.
Mr. Walsh continued:
The scourge of “dual pricing” has been around for too long.
Our hope is that continued action at government level will further the case for eliminating the practice of dual pricing and that sufficient steps will be taken in order to drive it out.
However, the hands of the consumer are not altogether tied either. As consumers, we can take steps to ensure we are getting the best value on the market – we simply need to shop around.
Results also showed that younger cohorts, or those between the ages of 18-24 (66%), are most likely to have experienced dual pricing in some form - understandable with less experience of insurance renewals and such!
Meanwhile, those in the 25-34 age bracket (29%) are most likely to say they weren’t aware of the practice.
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If you’re looking for more insurance-related information, we have a range of blogs and guides that will help you navigate the insurance industry:
- When taking out car insurance, you’ll want to avoid these 10 mistakes and pitfalls to ensure you don’t overpay or receive inadequate cover.
- Here are 12 things to consider when taking out car insurance to make sure that you’re getting the right cover for your needs.
- Thinking of buying home insurance? Here are 9 things to consider when taking out home insurance.
- Reducing your home insurance premium is easier than people think. Here are 10 ways to reduce your home insurance costs that won’t affect your level of cover.
Get in touch with us
Are you surprised to learn that women are less aware of dual pricing than men? Have you experienced dual pricing or price walking? We’d love to hear from you!