Table of Contents
Executive Summary
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- The market
- The general insurance market is shrinking under price pressure
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- Figure 1: General insurance revenue – Retail products – UK risks, by GWP, 2010-14
- Home and motor dominate general insurance business
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- Figure 2: Share of premium income, by sector, UK general insurance retail products, 2013
- Key players
- Aviva held off Direct Line to remain the largest underwriter in 2014
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- Figure 3: Largest personal lines underwriters, by proportion of GWP, 2014
- TV has grown to host half of all advertising efforts
- The consumer
- Two thirds have car or home contents insurance
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- Figure 4: Product ownership, September 2015
- Ease of understanding and arrangement remain important
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- Figure 5: Attitudes towards products and cover, September 2015
- The cost burden is a dominant concern for insurance customers
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- Figure 6: Attitudes towards cost and value, September 2015
- Commoditised products see strongest switching activity
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- Figure 7: Agreement with the statement 'I would be more interested in what I can get for free with an insurance policy than in the insurance itself (eg toys, vouchers, subscriptions)', by switching behaviour of car insurance owners, September 2015
- A third spend between £21 and £50 per month on insurance
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- Figure 8: Amount spent on general insurance products, 2014 and 2015
- Beyond price, UK-based customer service sways purchasing decisions
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- Figure 9: Factors influencing car insurance purchases, by age, September 2015
- Having a claim refused is the strongest internal driver for switching
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- Figure 10: Events that insurance customers say would definitely lead them to change insurance provider(s), September 2015
- What we think
Issues and Insights
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- Peer-to-peer insurance is calling the role of the traditional insurer into question
- The facts
- The implications
- Tumbling premiums spell trouble for product quality
- The facts
- The implications
The Market – What You Need to Know
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- The general insurance market is shrinking under price pressure
- Home and motor dominate general insurance business
Market Size
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- The general insurance market is shrinking under price pressure
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- Figure 11: General insurance revenue – Retail products – UK risks, by GWP, 2010-14
- Net Written Premiums have fallen but claims are under control
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- Figure 12: General insurance – Retail products – UK outgo and underwriting result, 2010-14
Market Segmentation
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- Home and motor dominate general insurance business
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- Figure 13: Share of premium income, by sector, UK general insurance retail products, 2013
- Motor business is a headache for insurers…
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- Figure 14: Underwriting ratio – UK general insurance retail products, 2010-14
- …but falling claims have kept most insurers clear of losses
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- Figure 15: Claims ratio – UK general insurance retail products, 2010-14
Key Players – What You Need to Know
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- Aviva held off Direct Line to remain the largest underwriter in 2014
- Channel innovation and new technologies are shaping strategies
- Insurers take their messages to TV in the battle to stand out
Underwriter Share
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- Aviva held off Direct Line to remain the largest underwriter in 2014
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- Figure 16: Largest personal lines underwriters, by GWP, 2012-14
Competitive Strategies
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- Finding new ways to reach the market
- Columbus Direct
- Cuvva
- Bought By Many
- Consumer-driven technology with a commercial focus
- Telematics and black box technology
- Wearable and video technology
Advertising and Marketing Activity
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- TV has grown to host half of all advertising efforts
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- Figure 17: Recorded above-the-line, online display and direct mail advertising expenditure on general insurance, by media type, 2012/13/2014/15
- Direct Line invests heavily to compete with price comparison sites
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- Figure 18: Top 20 brands for recorded above-the-line, online display and direct mail advertising expenditure on general insurance, 2012/13-2014/15*
- Insurers get competitive over paid and organic search
- Note on NMR data
The Consumer – What You Need to Know
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- Two thirds have car or home contents insurance
- The pursuit of free gifts drives switching and can undermine product quality
- 17% don’t know their total monthly insurance spend
- UK-based customer service is a draw for customers
- The impact of mis-selling should not be underestimated
Product Ownership
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- Two thirds have car or home contents insurance
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- Figure 19: Product ownership, September 2015
- Ageing enforces higher home and car insurance ownership
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- Figure 20: Ownership of most commonly held general insurance products, by age, September 2015
- Opportunities for cross-selling to older car and home insurance customers
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- Figure 21: Number of insurance products held, September 2015
Attitudes towards Products and Cover
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- Data tracking technology needs a boost to achieve mass-market appeal
- Employing photo and video surveillance should result in rewards for customers
- Ease of understanding and arrangement remain important
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- Figure 22: Attitudes towards products and cover, September 2015
Attitudes towards Cost and Value
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- The cost burden is a dominant concern
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- Figure 23: Attitudes towards cost and value, September 2015
Switching Behaviour
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- Commoditised products see strongest switching activity
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- Figure 24: Switching behaviour, September 2015
- The pursuit of free gifts drives switching and undermines product quality
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- Figure 25: Agreement with the statement 'I would be more interested in what I can get for free with an insurance policy than in the insurance itself (eg toys, vouchers, subscriptions)', by switching behaviour of car insurance owners, September 2015
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- Figure 26: Agreement with the statement 'I would be more interested in what I can get for free with an insurance policy than in the insurance itself (eg toys, vouchers, subscriptions)', by switching behaviour of home contents insurance owners, September 2015
Amount Spent on General Insurance Products
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- A third spend between £21 and £50 per month on insurance
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- Figure 27: Amount spent on general insurance products, 2014 and 2015
- Almost one in five don’t know how much they pay for insurance each month…
- …and women are more likely to be uncertain
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- Figure 28: Amount spent on general insurance products, by gender, September 2015
Factors Influencing Insurance Purchases
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- Beyond price, UK-based customer service sways purchasing decisions
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- Figure 29: Factors influencing insurance purchases, September 2015
- Younger, inexperienced customers seek support
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- Figure 30: Factors influencing car insurance purchases, by age, September 2015
Motivation to Switch or Consider Switching
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- Having a claim refused is the strongest internal driver for switching
- Product admin fees are less likely to prompt switching
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- Figure 31: Events that would lead to changing/considering changing current insurance provider(s), September 2015
- Most customers are sensitive to the perceived negatives about the service they receive
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- Figure 32: Number of events that would lead to changing/considering changing current insurance provider(s), September 2015
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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