As cost-of-living pressures intensify, new research from Youi shows many Australians approach insurance not as a discretionary spend but as a key financial safeguard.

According to the insurer’s Financial Fitness study, conducted by Dentsu Intelligence last month, 78% of Australians review their insurance spending at least annually, but only 40% are likely to switch providers in the next 12 months.

This distinction is telling, according to Youi chief customer officer Anthony Antonucci.

“We’re seeing Australians becoming more vigilant about where their money is going, and insurance is no exception,” he said.

“While people are renewing their policies, they are not switching for the sake of it – Australians are chasing value over price.”

About 42% of respondents say their financial position has deteriorated over the past two years, while 66% indicate they are merely getting by and would struggle to absorb an unexpected expense.

Cost pressures are pervasive, with 62% experiencing financial stress daily or on most days, and 91% attributing this primarily to rising essential expenses such as groceries and fuel.

Despite this, insurance remains among the least likely expenses to be cut, with just 16% identifying it as a target for reduction.

Mr Antonucci cautions against making coverage decisions driven by price.

“The risk in choosing policies purely on price is that [customers can unknowingly] compromise on coverage. Shortfalls and exclusions often only become visible at claims time, when it is too late to fix the gap.”

About 20% of Australians treat insurance as a “set-and-forget” expense, and 33% believe reviewing their policies would not influence premiums, indicating a disconnect between perceptions and potential savings.

In response, Youi has introduced a Financial Fitness Calculator to enhance financial literacy and assist households in mapping expenditure.

“Loyalty is earned, not assumed,” Mr Antonucci said. Insurers can win “long-term loyalty by being transparent about coverage, encouraging regular reviews as circumstances change, and equipping customers with tools that make complex financial decisions easier to navigate”.