Table of Contents
Overview
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- What you need to know
- Scope of this Report
Executive Summary
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- The market
- Premiums remained at record levels in 2018
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- Figure 1: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2013-23
- Companies and brands
- Direct Line is the UK’s largest personal motor insurer
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- Figure 2: Leading personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2016 and 2017 (UK business only)
- Confused.com remains the biggest car insurance advertiser
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- Figure 3: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2014-18
- Insurers struggle for differentiation
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- Figure 4: Attitudes towards and usage of selected brands, January 2019
- The consumer
- Comprehensive policies dominate the market
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- Figure 5: Car insurance ownership, insurance holders only (rebase), November 2018
- General insurers’ heritage puts them out in front
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- Figure 6: Current car insurance provider, November 2018
- A third of drivers switched at their last renewal
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- Figure 7: Behaviour at last car insurance policy renewal, rebase, November 2018
- Satisfaction with renewal quotes is the biggest barrier to shopping around
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- Figure 8: Reasons for not shopping around at last car insurance renewal, November 2018
- Price is the key driver in product choice
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- Figure 9: Factors affecting choice of car insurance policy, November 2018
- Insurers achieve impressive levels of satisfaction
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- Figure 10: Satisfaction with current car insurance policy, November 2018
- There is still work to be done on improving transparency
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- Figure 11: Attitudes towards car insurance, November 2018
- What we think
Issues and Insights
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- Drivers have good intentions to buy high-level cover, but cost is key
- The facts
- The implications
- The market is congested but has room for a truly different provider
- The facts
- The implications
- Impressive levels of satisfaction can be problematic
- The facts
- The implications
The Market – What You Need to Know
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- Premiums remained at record levels in 2018…
- …but new car sales slumped
- Claims costs reach a record £8.6 billion
- Civil Liability Act becomes law
Market Size and Forecast
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- Premium growth flattened in 2018
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- Figure 12: Gross written personal motor insurance premiums (UK domestic business only), 2014-18
- Premiums expected to rise slowly and unevenly
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- Figure 13: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2013-23
- Figure 14: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), at current and constant prices, 2013-23
- Forecast methodology
Market Environment
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- Car parc growth halved in 2018…
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- Figure 15: Number of licensed cars, Great Britain, 2010-18
- …but car ownership remains consistent
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- Figure 16: Car ownership, November 2018
- New car sales fell by 7%
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- Figure 17: Number of new car registrations, 2012-18
- Premiums fell slightly in 2018
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- Figure 18: Average premium for comprehensive car insurance policies, annual data, 2014-18
- Figure 19: Average premium for comprehensive car insurance policies, quarterly data, Q1 2014-Q4 2018
- The cost of claims reached a record high in 2018
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- Figure 20: Volume and gross value of private car claims settled, 2013-18
Regulatory and Legislative Changes
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- Civil Liability Act becomes law
- Brexit questions still to be answered
- Consultation launched into autonomous cars
- FCA investigating general insurance pricing
Companies and Brands – What You Need to Know
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- Direct Line is the UK’s largest personal motor insurer
- Aviva looks to innovation to stay near the top
- Insurers are innovating to reflect changing driving habits
- Confused.com remains the biggest car insurance advertiser
- Insurers struggle for differentiation
Market Share
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- Direct Line is the UK’s largest personal motor insurer
- Admiral continues to grow
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- Figure 21: Top 20 domestic motor insurance underwriters – UK, by share of total market GWP – ABI members only, 2017
- Aviva looks to innovation to stay near the top
- Hastings enjoyed impressive growth in 2017
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- Figure 22: Leading personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2016 and 2017 (UK business only)
Launch Activity and Innovation
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- Catering for changing driving habits
- By Miles introduces pay-per-mile insurance for low-mileage drivers
- Allianz signs up to insure Drivy users
- Preparing for automated cars
- AXA signs up to provide car insurance through InsurTech app Brolly
- CarFinance 247 to move into the insurance space
Advertising and Marketing Activity
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- Adspend topped £100 million despite annual drop
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- Figure 23: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2014-18
- Confused.com remains the biggest advertiser, ahead of Direct Line
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- Figure 24: Top 10 spenders of above-the-line, online display and direct mail advertising on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2016-18
- TV is the primary advertising channel
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- Figure 25: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, by media type, 2018
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
- General insurers struggle to stand out and attract limited trust
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- Figure 26: Attitudes towards and usage of selected brands, January 2019
- Key brand metrics
- Post Office can leverage frequent use of other business lines to promote insurance
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- Figure 27: Key metrics for selected brands, January 2019
- Brand attitudes: Breakdown providers benefit from strong reputations
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- Figure 28: Attitudes, by brand, January 2019
- Brand personality: Direct Line stands out as a fun brand
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- Figure 29: Brand personality – macro image, January 2019
- Brand personality: The AA and RAC are seen as reliable
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- Figure 30: Brand personality – micro image, January 2019
- Brand analysis
- Breakdown providers are well placed to capitalise on recovery reputations
- Entertaining adverts rub off on Direct Line
- Aviva and Direct Line lead other general insurers for preference
The Consumer – What You Need to Know
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- Comprehensive policies dominate the market
- General insurers’ heritage puts them out in front
- A third of drivers switched at their last renewal
- Satisfaction with renewal quotes is the biggest barrier to shopping around
- Price is the key driver in product choice
- Insurers achieve impressive levels of satisfaction
- There is still work to be done on improving transparency
Car Insurance Ownership
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- Comprehensive policies dominate the market
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- Figure 31: Car insurance ownership, November 2018
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- Figure 32: Car insurance ownership, insurance holders only (rebase), November 2018
- Under-25s more likely to choose third-party cover than telematics
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- Figure 33: Car insurance ownership, insurance holders only (rebase), by age, November 2018
Car Insurance Providers
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- General insurers’ heritage puts them out in front
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- Figure 34: Current car insurance provider, November 2018
- The AA is particularly successful at attracting younger drivers
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- Figure 35: Type of current car insurance provider, by age, November 2018
Renewal and Arrangement Behaviour
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- A third of drivers switched at their last renewal
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- Figure 36: Behaviour at last car insurance policy renewal or arrangement, November 2018
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- Figure 37: Behaviour at last car insurance policy renewal, rebase, November 2018
- Shopping around is accepted as the done thing…
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- Figure 38: Likelihood to shop around at next car insurance renewal, November 2018
- …but vulnerable consumers are most at risk of missing the best deals
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- Figure 39: Likelihood to shop around at next car insurance renewal, by household financial situation, November 2018
Barriers to Shopping Around at Renewal
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- 62% who didn’t shop around didn’t see a need to
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- Figure 40: Reasons for not shopping around at last car insurance renewal, November 2018
- Younger drivers are more apathetic, over-45s have more valuable relationships
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- Figure 41: Selected reasons for not shopping around at last car insurance renewal, by age, November 2018
Factors Affecting Choice of Policy
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- Price is the key driver in product choice
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- Figure 42: Factors affecting choice of car insurance policy, November 2018
- Just 17% got the highest-level cover they could afford
- Reputational factors matter to those who can afford to consider them
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- Figure 43: Selected factors affecting choice of car insurance policy, by household financial situation, November 2018
Satisfaction with Car Insurance
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- Insurers achieve impressive levels of satisfaction
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- Figure 44: Satisfaction with current car insurance policy, November 2018
Attitudes towards Car Insurance
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- Drivers’ desire for high-level cover clashes with demand for low prices
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- Figure 45: Attitudes towards car insurance, November 2018
- Trust and differentiation are in short supply
- There is still work to be done on improving transparency
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 46: Best- and worst-case forecast for the value of gross written premiums for personal motor insurance (UK business only), 2018-23
- Forecast methodology
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