25% of policyholders say that they would be willing to pay more to hold all their insurance policies with a single insurer. Interest in this idea is higher among Millennials, reflecting the willingness of this group to pay a bit extra for a more convenient and flexible service.

Just 22% of policyholders agree that insurers have treated customers fairly following COVID-19 related issues. Unlike the retail banking sector that has seen its reputation boosted by its response to the crisis, insurers have faced a different set of challenges, some of which threaten to damage the market’s reputation. COVID-19 will increase scrutiny of policy terms and conditions, and to ensure people have the right level of cover in the future.

The financial challenges caused by COVID-19 will lead to some people to consider whether their policies truly offer value for money. In particular, annual travel insurance policies may no longer be deemed necessary, while other discretionary insurance will also be under consideration as some households face increased financial pressures. This will be intensified by national lockdown measures introduced on 4 January 2021 which will see more home working, lower vehicle use and ongoing travel restrictions.

The uncertainty that COVID-19 has caused consumers will change how they think about insurance in some markets. Travel and health insurance are likely to be boosted in the mid to longer-term as people seek to ensure they are covered for future disruption. Changes to lifestyles, including less commuting and more home working, could also cause some to review their motor and home insurance needs. In particular, providers have an opportunity to develop more flexible products that can be adjusted to reflect changing circumstances.

• The impact of COVID-19 on the general insurance market, including consumer attitudes towards the sector’s handling of the crisis.

• The key economic, societal and regulatory factors affecting change in the general insurance market.

• Ownership of different insurance products, switching and cancellation of general insurance products.

• Expectations and plans for the next 12 months in relation to general insurance.

• Interest in general insurance features, and attitudes toward the changing general insurance environment.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. It was not until 15 June that non-essential stores were allowed to re-open, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a full month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions in January 2021, effectively leading to a full UK-wide lockdown. There is no defined end date for the lockdown, although the legislation regarding to the English lockdown that was presented to Parliament extends to 31 March.

The UK’s vaccination programme started on 8 December 2020, and with both the Pfizer-BioNTech and the Oxford-AstraZeneca vaccines licenced for use in the UK, the government aims to offer a vaccine to 15 million people by mid-February.

Much of this Report was prepared in December 2020, before the announcement of the January lockdown, and when the extent of the vaccine rollout was less clear.

However, the content was reassessed and, where necessary, adjusted on 7 January, in order to ensure that our analysis and our forecast expectations still hold true.

Our core assumptions on the path of the pandemic had always included an expectation of severe disruption to markets and consumers’ lifestyles well into 2021, with a strong likelihood that the virus would still be with us even into 2022. Although the second wave of infections and subsequent lockdown puts us towards the negative end of our initial expectations, these developments are still broadly consistent with our previous assumptions.

Similarly, Mintel had factored in the likelihood that an effective vaccine would be available from early- to-mid 2021. The licensing of the Pfizer-BioNTech and Oxford-AstraZeneca vaccines puts us slightly ahead of that assumption, but the challenge associated with rolling out a new vaccination programme to millions of people means that our previous assumptions are still broadly consistent with the new reality.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its November 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP will have fallen by 11.3% in 2020, recovering by 5.5% in 2021, and 6.6% in 2022. GDP is not expected to return to pre-COVID levels until Q4 2022. The central scenario has unemployment peaking at 7.5% in Q2 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q4 2021. Its more negative scenario, by contrast, would mean that GDP does not recover until Q3 2024.

From the start of the outbreak, we have made the assumption that an effective vaccine would not be widely available until well into 2021. On 9 November, Pfizer and BioNTech announced highly encouraging results from trials of their vaccine, followed by similarly positive results from Moderna and the AstraZeneca/Oxford trials. The first patients were vaccinated on 8 December, but the full rollout will take many months, meaning that Mintel is still making the assumption that we will be living with COVID for some time to come.

For the purposes of this Report, Mintel has used the following definitions:

This Report is a consumer research-focused overview of the UK personal lines general insurance market.

General insurance is insurance that covers (non-life) risks for a limited period, typically one year.

The main sectors within the personal lines market are:

Motor – Motor policies cover the legal liabilities arising from the use of a motor vehicle, such as a private car or motorcycle. Comprehensive policies additionally cover damage to the vehicle (see Mintel’s Motor Insurance – UK, March 2020 Report).

Property – Property policies cover specified property that may be damaged or destroyed by events or perils such as fire, storm, subsidence or theft (see Mintel’s Home Insurance – UK, December 2020 Report).

Accident and health – Comprises two main types of business: personal accident and medical expenses. Personal accident policies will pay a lump sum or weekly benefits in the event of accidental death or a specified injury. PMI will pay medical treatment costs for acute conditions (see Mintel’s Consumers and Health Insurance – UK, October 2020 Report).

Miscellaneous and pecuniary loss – Relates to financial losses that may have occurred, includes travel insurance (see Travel Insurance – UK, February 2020), pet insurance (see Mintel’s Pet Insurance – UK, August 2020 Report), gadget insurance (see Mintel’s Gadget Insurance – UK, July 2020 Report) legal expenses, etc.