Since Mintel last covered the UK’s private motor insurance market in 2005, little has changed. The market is still as fiercely competitive as ever, which has meant that providers are finding it difficult to raise premiums to help meet both their outgoings as well as the added cost of regulation. Indeed, the AA’s British Insurance Premium Index indicates that, despite the rising cost of claims, premiums have fallen over the last few quarters. Competitive pressure has clearly intensified the downward pressure on prices, particularly as new low-cost entrants seek to gain market share. Indeed, Mintel estimates that the industry recorded an underwriting loss in 2005, the eleventh consecutive year that the industry has failed to reach profitability.

The aim of this report is to assess the issues that are currently facing the motor insurance market. After examining the factors currently affecting the market, Mintel then draws on data published by the ABI to establish the size of the market. The changing dynamics of distribution are evaluated, as is advertising and promotional activity. The report then considers the subjects of claims, premium pricing, uninsured driving and non-standard risk before analysing consumer activity in this market.