Admiral PLC’s (LON:ADM) decision to refund £25 to car and van drivers due to COVID-19 has paid substantial rewards, according to the latest research from Consumer Intelligence.
The premium rebate cost the insurer around £110mln, but this would have been paid for by reduced claims due to fewer journeys and quieter roads said the data group.
A less predictable benefit has been that Admiral’s car insurance customer retention rate has risen to 81% from 68%, which will save acquisition costs for around half a million customers.
Home insurance has also seen a 10 percentage point uptick in retentions, said Consumer Intelligence.
Admiral announced its Stay at Home refund in April and was the only insurer to bring in such as policy.
The data group adds that last year Admiral customers were the among the most fickle, but this year as many as 21.4% of customers renewed their car insurance without shopping around in the four months to July.
Ian Hughes, Consumer Intelligence’s chief executive, said: “Whilst the number of people renewing without shopping around has increased overall in this period from 16.9% to 17.6% – a behaviour linked to vulnerability – Admiral’s turnaround is bigger than that. It has gone from market lagging to market-beating.”
Admiral shares eased 1.2% today to 2,802p but since April have risen by more than 26%.