Having recently looked around for insurance as a consumer and been close to the subject as a researcher, it is clear that insurers still almost exclusively appeal to consumers with introductory offers which fall away after month 12 of a policy.

This type of offer may satisfy the insurer’s acquisition objectives, but potentially it encourages consumers to view the policy more as an easily transferable commodity rather than developing a relationship with the company.

Whilst encouraging consumers to think about a relationship which lasts more than one year carries some logic to the insurer, ‘loyalty’ (the buzz-word for companies not so long ago) amongst consumers has moved to the back seat within motor insurance and been stored in the loft in home insurance!

In the current economic climate, perhaps keeping the focus on acquisition and ensuring you are acquiring more than you lose is an understandable strategy, rather than changing tack and perhaps a more risky strategy focusing on retention based offers.

Let’s face it, we all like a bargain and the ease with which it is to compare and switch may create a transient insurance buying public but are insurers perpetuating this by focussing on offering instant saves? Is there not a middle ground?

On further investigation of major insurers’ websites I would conclude that the answer is a reassuring ‘yes’.   There are a couple of insurers trying to build loyalty or encourage retention. In particular Halifax and More Th>n policies offer benefits which provide annual savings each year for the life of their home insurance policies or cashback after a specified number of years.

It will be interesting to see whether any of the few 1+ year offers out there achieve what they want to achieve but insurers may already be missing a trick.

For instance, imagine an advert which has the following type of message ‘save £50-100 in year 1 or fix your insurance premiums for 3 years’. With car insurance premiums increased by an average of 37.5% in the 12 months running up to quarter 4 2010, that would certainly be an attractive option for many.  I’m sure that I’m not the only researcher or client to have heard consumers complain about the renewing their insurance policies every year.

So can insurers do more to retain customers?

Given current financial circumstances, insurers are going to have to adopt a new strategy, be brave enough to do things differently and challenge current market conventions. Remember most consumers do not enjoy the renewal process – so why do we make them work every 12 months to remain a customer.

Whether bringing in customers and encouraging them to renew year after year is ‘loyalty’ or simply ‘retention’ is probably one to tackle in another blog!