The auto insurance market has never been so competitive with more than a hundred approved companies. However, the level of premiums continues to increase. Is changing car insurance the solution to pay less?
Auto insurance is a highly competitive market 20 billion euros in annual turnover. Compulsory for each of the 38 million French private vehicles, the auto insurance contract makes professionals salivate. The struggle to gain market share coupled, for more than 10 years now, with the emergence of new players such as rate comparators should have pulled prices down, as in the telephone sector.
However, it is not. The premiums continue to rise year after year, in proportions that the evolution of the private car fleet – 2 million additional vehicles since 2012 – is not enough to explain. The total contributions paid by the insured thus reach 23 billion euros in 2020 against 18 billion ten years earlier. Over the same period, the average annual amount of the premium rose from 418 to 434 euros excluding taxes, according to figures from France Assureurs, with strong disparities depending on the vehicle and the level of cover (civil liability, third party or all risks).
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Heavy management fees
At the same time, increased competition may have had negative effects: to attract new customers, as well as to satisfy those in their portfolio, insurers have pulled out all the stops. From 2010 to 2020, their management and acquisition costs, which notably include the cost of advertising campaigns, have increased sharply. According to the statement by the Prudential Control and Resolution Authority (ACPR) based on declarations by insurers, these expenses rose from a total of 3.3 billion to 4.6 billion euros per year for all insurers. Precisely, France Assureurs values these expenditure items at an average amount of 12.40 euros on 100 euros of premium vers.
Similarly, historical players such as mutuals – Maif, Macif, Maaf, GMF, which manage one out of two contracts in the sector – often have heavy management costs because they offer a local network of branches and a large number of telephone advisers. All this has a cost, in real estate as well as in salaries.
New players who do not cut prices
Conversely, no-insurers rely on online advertising, data, social networks and a top-level mobile application to acquire new policyholders. The absolute model is Uber Eats or Netflix. A tool available at all times, of excellent quality and instantly usable, because in your pocket, explains Christophe Dandois, co-founder of Leocare. The watchword: the customer experience! That is to say all the stages experienced by the customer, from his first research to his support during a disaster, because the logic of the user is not that of the professional, explains Marc Bourgois, advertiser and teacher in strategy at the university of Paris.
Despite a between range 6.63 euros per month, there is no desire to cut prices, among new entrants warns Christophe Dandois. Here we are. Beyond tricks, how do insurers work their rates? Leocare’s customer portfolio is made up of 50% all-risks insured with an average premium of 497 euros. A month’s contribution is also offered for any new subscription… depending on the profile.
For its part, Boursorama’s Carapass, which has increased its average premium by 2% per year since its launch in 2018, has chosen a strategy that corresponds to the bank’s urban and young clientele: a fixed premium depending on the vehicle and a price per distance then, heading for 12,000 kilometers so as not to see the bill soar. Average premium? 270euros per year… to the third. We do not offer an entry bonus and the price cannot be negotiated, explains Xavier Prin, marketing director of the online bank.
Coupl contract and life offer
At Maif, the price of the contract can drop by 10 to 15% for loyal customers who sign a car contract and a home contract. At Generali, we offer life reductions of 100 euros in the event of double subscription. Other insurers offer discounts for young drivers if their parents are customers themselves. A boon as this age category is feared by insurers.
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The young person is a bad profile in the language of insurers. That is to say, it statistically presents a high risk of long and costly compensation. As a result, he often has to pay more for his insurance. According to the data provided by the MoneyVox comparator Assurland.com, the price of the civil liabilitythe minimum insurance required to drive a vehicle, varies between 265 and 550 euros per year, i.e. between 22 and 45 euros per month, for a young 23-year-old student driving a Clio and having had no claims since obtaining his license in 2018. As for all-risk insurance, it can climb up to 1000 euros per year for such a profile.
As we can see, beyond the price calculated according to the unique profile of each driver (age, sex, vehicle, job, place of residence, driving history, etc.), the price differences can still be significant.
Bonus for good drivers
Good drivers with more experience take full advantage of the bonus-malus system which allows them a reduction of up to 50% of the basic premium. Thus, for the family vehicle Peugeot 308SW of a 37-year-old driver living near Rennes, with a bonus of 0.5 and having declared a glass breakage claim in the last three years, he will have to pay the maximum 650 euros at all risks, according to Assurland.com. By playing the competition, he could even hope to find a contract around 300 euros because the insurers refute any pre-established price list.
Indeed, the calculation of the premium is made according to the unique profile of each driver: age, sex, vehicle, job, driving history but also the place of residence. According to a recent study by Assurland, Ile-de-France residents must spend 729 euros on average for their car insurance against 484 euros for the Bretons.
Unexpected competition from bank-insurers
Incumbent insurers also face an unexpected competitor: bank insurers such as Crdit Mutuel, Banque Populaire or BNP Paribas. Their average price is more attractive by 12 euros on average, contract gal. They now represent 18% of contracts, according to the firm Facts&Figures, and are the only ones to have made progress in recent years.
For 8 years, bank insurers have benefited in particular from their local network and the still strong attraction of the French for physical meetings. They also benefit from an effective selling point: including auto insurance as part of an auto loan for the purchase of a car.
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Price isn’t everything
But be careful to look beyond the price. The amount of the contribution is not always the most important element to take into account, warns Olivier Gayraud, lawyer at the association Consumption Housing Framework of Life (CLCV). Take a good look at what is covered and what is not. Because according to the various tests carried out by MoneyVox, changing insurance to save money, and this equivalent guarantee, is sometimes illusory.
To save money, one of the tricks is rather toadapt your cover with his insurer according to his own needs. Do you need assistance if you only make short trips around town? If you drive little, is it really essential to take advantage of a replacement vehicle when your car is immobilized in the garage?
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Other option: adjust the deductible amount, following a claim, which can vary from simple to double depending on the contract. The larger it is, the lower your insurance premium. It is thus possible to save more than 20% by taking out a high deductible. It is still necessary to plan an amount that you will be able to pay in the event of a claim.
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