Non-transparent markets make switching difficult

» Every year, just over every third consumer switches mobile company, and almost every tenth consumer switches private household insurance providers.

» Consumers switch mobile and insurance providers to save money. This applies to 44 per cent of mobile customers and 68 per cent of insurance customers.

» Price advertising inspires more consumers into switching mobile subscriptions. The acquisition of new products or bad experiences also encourage consumers to switch both mobile and insurance provider.

» Consumers are not involved in their insurances. This reduces mobility in the insurance market.

» Consumers find it difficult to identify the right mobile and insurance providers and find both markets non-transparent. This has several consequences:

» Problems of gaining an overview of the solutions in the markets make every fourth consumer refrain from switching mobile and insurance providers.

» Of mobile customers, 33 per cent have considered switching providers without going through with it, and the same applies to 43 per cent of insurance customers.

» Every second mobile customer and every third insurance customer have switched providers without first searching the market.

» Mobile and insurance companies increase the lack of transparency by differentiating their products with a high degree of detail. However, consumers would rather have an overview of the products than the highly tailored products offered in the markets today.

» Consumers find the actual switching of mobile and insurance providers easy.

» Benefits such as the possibility of phoning their friends and family free of charge, make consumers stay with their present mobile and insurance providers.

The analysis seems to show that there may be a potential for increasing the number of insurance customers who search the market and switch providers. By contrast, it is not expected that the proportion of mobile customers switching providers every year can increase substantially. In the mobile market, the potential consists rather in making more consumers search the market before switching.

The Danish Competition and Consumer Authority wants to make it easier for consumers to switch providers on an informed basis. Based on the analysis the Authority therefore recommends that:

» The transparency in the mobile market be increased while giving consumers a better basis for clarifying their own needs.

» The transparency in the insurance market be increased while giving consumers a better basis for clarifying their own needs.

» Consumers be encouraged to become more involved in their own insurance policies.

For further information please contact Chief Special Advisor Susanne Thaarup + 45 41 71 52 92. 

Summary and main conclusions (pdf)