Table of Contents
Introduction
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- Market definitions
- Note on consumer research
- Abbreviations
Executive Summary
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- The market
- Nine in ten have some type of general insurance product
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- Figure 1: General insurance product ownership, August 2011
- Gross written premiums increased by 4% in 2010
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- Figure 2: NWPs, total outgoings and underwriting result for annual general insurance business, 2006-10
- Market factors
- Appetite for insurance declines
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- Figure 3: Agreement with the statement “it is important to be well insured for everything”, 2007-11
- Companies, brands and innovation
- RBS continues to lead the way, but competitor brands gain ground
- Low levels of trust and differentiation
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- Figure 4: Attitudes towards and usage of general insurance brands, October 2011
- The consumer
- Consumers prioritise saving and debt repayment activity over insurance matters
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- Figure 5: Consumer financial priorities, August 2011
- Most policyholders shop around at renewal but few are prepared to cancel cover
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- Figure 6: Shoparound and cancellation behaviour, by product, August 2011
- Two fifths believe insurance is even more important when things are tough financially
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- Figure 7: Attitudes towards general insurance, August 2011
- Only 50% are confident that they have sufficient insurance cover in place
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- Figure 8: Buying behaviours and approach to cover, August 2011
- Policyholders seek good value for money
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- Figure 9: Purchasing considerations among policyholders, August 2011
- What we think
Issues in the Market
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- Where does general insurance rank in the list of consumer financial priorities?
- How has the challenging economy affected the demand for general insurance products?
- Is there any customer loyalty left in the general insurance market?
- To what extent do consumers trust the insurance sector?
- What do consumers look for when arranging general insurance policies?
Future Opportunities
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- Providing a helping hand to uncertain consumers
- Reassurance in an challenging economy
Market Environment
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- Key points
- Economic backdrop creates difficult conditions for insurers
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- Figure 10: UK GDP growth – percentage change, latest quarter on previous quarter, Q2 2008-Q3 2011
- Motor insurance premiums are starting to level off
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- Figure 11: AA British Insurance Premium Index market average trends, April 2008-October 2011
- Property premiums threatened by weather-related costs
- Detected fraudulent claims continue to rise
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- Figure 12: Detected general insurance fraud rates, by volume and value, 2004-10
- Regulatory and legislative changes pose challenge for insurers
- Solvency II delayed to January 2014
- Change to supervisory structure
- Consumer Insurance (Disclosure and Representations) Bill
- Ban on referral fees
Consumer Environment
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- Key points
- The appetite for insurance has declined
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- Figure 13: Agreement with the statement “it is important to be well insured for everything”, 2007-11
- Consumers lack trust in the insurance sector…
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- Figure 14: Consumer attitudes towards insurance providers, May 2011
- … although attitudes tend to be based on perception and not experience
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- Figure 15: Consumer attitudes towards insurance providers, by insurance claimants, May 2011
- Consumer confidence remains weak…
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- Figure 16: Monthly, 3-monthly and 12-monthly UK consumer confidence indices, January 1997 to October 2011
- … although most people are getting by
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- Figure 17: Current financial situation, April 2009-August 2011
- One in four are nervous about the next 12 months
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- Figure 18: Financial confidence for the next 12 months, April 2009-August 2011
SWOT Analysis
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- Figure 19: SWOT analysis for personal lines general insurance business, 2011
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General Insurance Market Size
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- Key points
- Premiums increase by 4% in 2010…
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- Figure 20: Summary of annual general insurance business – UK risks, by sector NWPs, 2006-10
- … but market still delivers a substantial underwriting loss
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- Figure 21: UK outgo and underwriting result for annual general insurance business, 2006-10
- Motor insurance performance continues to deteriorate
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- Figure 22: Underwriting ratio – UK annual general insurance business, by sector, 2006-10
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- Figure 23: Claims ratio – UK annual general insurance business, by sector, 2006-10
Market Segmentation
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- Key points
- Private motor insurance is largest general insurance sector
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- Figure 24: Share of premium income (UK annual business), by sector, 2010
- Premium income experience varies between sectors
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- Figure 25: Premium analysis of UK general insurance business – 2005-06 to 2009-10
- Personal lines business accounts for 60% of GWP
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- Figure 26: Split of general insurance GWP, by personal, commercial and MAT sectors, 2010
Underwriter Share
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- Key points
- RBS remains the leading UK general insurance underwriter
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- Figure 27: Largest general insurers/reinsurers – total market (direct and facultative business), based on GWP, 2008-10
- Underwriters gaining ground
Companies and Products
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- Aviva
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- Figure 28: Key financial data for Aviva UK General Insurance business, H1 2010-H1 2011
- Figure 29: Key financial data for Aviva UK General Insurance business, 2009-10
- AXA Insurance
- Chartis Insurance
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- Figure 30: Key financial data for Chartis UK, 2009-10
- RBS Insurance
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- Figure 31: Key financial data for RBS Insurance, H1 2010-H1 2011
- Figure 32: Key financial data for RBS Insurance, 2009-10
- RSA Insurance
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- Figure 33: Key financial data for RSA UK Insurance, H1 2010-H1 2011
- Figure 34: Key financial data for RSA UK Insurance, 2009-10
Brand Research
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- Brand map
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- Figure 35: Attitudes towards and usage of general insurance brands, October 2011
- Correspondence analysis
- Brand attitudes
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- Figure 36: Attitudes, by general insurance brand, October 2011
- Brand personality
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- Figure 37: General insurance brand personality – macro image, October 2011
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- Figure 38: General insurance brand personality – micro image, October 2011
- Brand experience
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- Figure 39: General insurance brand usage, October 2011
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- Figure 40: Satisfaction with general insurance brands, October 2011
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- Figure 41: Consideration of general insurance brands, October 2011
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- Figure 42: Consumer perceptions of current general insurance brand performance, October 2011
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- Figure 43: General insurance brand recommendation – Net Promoter Score, October 2011
- Brand index
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- Figure 44: General insurance brand index, October 2011
- Figure 45: General insurance brand index vs. recommendation, October 2011
- Target group analysis
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- Figure 46: Target groups, October 2011
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- Figure 47: General insurance brand usage, by target groups, October 2011
- Group One – Conformists
- Group Two – Simply the Best
- Group Three – Shelf Stalkers
- Group Four – Habitual Shoppers
- Group Five – Individualists
Brand Communication and Promotion
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- Key points
- Adspend continues on a downward trend
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- Figure 48: Topline adspend for general insurance products, 2008/09-2010/11
- Adspend on major insurance products declines…
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- Figure 49: Adspend, by general insurance category, 2008/09-2010/11
- … but there is growth in smaller insurance markets
- TV advertising becomes main channel for adspend
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- Figure 50: General insurance adspend, by media type, 2008/09-2010/11
- Most insurers reduce adspend over the last 12 months
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- Figure 51: Top 20 general insurance advertisers, 2008/09-2010/11
- A note on adspend
Channels to Market
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- Key points
- Intermediary channel fights back
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- Figure 52: Proportional distribution for personal lines general insurance, by value, 2001-10
- Relative stability in distribution of motor insurance
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- Figure 53: Proportional distribution for personal lines motor insurance, by value, 2001-10
- Intermediaries are growing share in personal property market
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- Figure 54: Proportional distribution for personal lines property insurance, by value, 2001-10
- Aggregators play a major role in car and home insurance markets
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- Figure 55: Aggregator usage, by insurance product, April 2011
- Distribution channel has direct impact on customer loyalty
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- Figure 56: Car insurance loyalty, by preferred channel for arranging cover, October 2011
Consumer Financial Priorities
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- Key points
- Bolstering savings is the main priority for consumers
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- Figure 57: Consumer financial priorities, August 2011
- Being well insured is a priority for one in five
- Insurance tops list of financial priorities among 65+ age group
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- Figure 58: Consumer financial priorities, by age group, August 2011
- Some people have a greater inclination for insurance
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- Figure 59: Consumer financial priorities, by consumer financial priorities, August 2011
- Appetite for insurance is not entirely determined by financial health
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- Figure 60: Consumer financial priorities, by current financial situation, August 2011
- Financial confidence has little bearing on desire to be fully insured
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- Figure 61: Consumer financial priorities, by financial confidence for the next 12 months, August 2011
General Insurance Product Ownership
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- Key points
- Almost 90% of internet users have some type of general insurance cover
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- Figure 62: General insurance product ownership, August 2011
- Bundled products and policy add-ons boost ownership of some products
- Over-35s and more affluent consumers are more likely to have cover
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- Figure 63: Demographic overview of general insurance product ownership, by product, August 2011
- Almost two fifths have at least five types of general insurance cover
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- Figure 64: Repertoire of general insurance product ownership, August 2011
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- Figure 65: General insurance product ownership, by repertoire of products owned, August 2011
- Financial health is generally reflected in insurance product ownership…
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- Figure 66: General insurance product ownership, by current financial situation, August 2011
- … but there are some exceptions
Shoparound and Cancellation Behaviour
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- Key points
- Consumers are shopping around at renewal…
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- Figure 67: Shoparound and cancellation behaviour, by product, August 2011
- … but few are willing to cut back or cancel their cover
- Consumers seek reassurance rather than reduced cover
- Older consumers are more likely to appreciate the value of insurance
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- Figure 68: Cancellation behaviour, by age group, August 2011
- Aversion to risk increases with age
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- Figure 69: Responses to statements about insurance and risk, by age group, 2011
- Likelihood to shop around for insurance increases with affluence
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- Figure 70: Responses to the statement ‘I shopped around when I last renewed this type of cover’, by gross annual household income, August 2011
Attitudes Towards General Insurance
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- Key points
- Almost two thirds believe that some insurances are a waste of money
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- Figure 71: Attitudes towards general insurance, August 2011
- Lack of consumer trust undermines insurance market
- 40% believe insurance is more important in a tough economic climate
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- Figure 72: Responses to statement ‘Insurance is even more important when things are tough financially’, by gender, age group and annual household income, August 2011
- Financial strugglers are more sceptical about the insurance industry
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- Figure 73: Attitudes towards general insurance, by current financial situation, August 2011
- Demonstrating value and greater differentiation could help to build trust
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- Figure 74: Cross-analysis of attitudes towards general insurance, August 2011
Buying Behaviour and Approach to Cover
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- Key points
- Only 50% are confident that they have sufficient insurance cover
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- Figure 75: Buying behaviours and approach to cover, August 2011
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- Figure 76: Cross-analysis of buying behaviours and approach to cover, August 2011
- An opportunity to provide consumers with real peace of mind
- Time-pressed adults need a helping hand to get the right level of cover
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- Figure 77: Buying behaviours and approach to cover, by gender, age group and working status, August 2011
- Financially healthy are more confident about their insurance coverage
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- Figure 78: Buying behaviours and approach to cover, by current financial situation, August 2011
Purchasing Considerations
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- Key points
- Consumers opt for good value rather than the cheapest price
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- Figure 79: Purchasing considerations among policyholders, August 2011
- Price-sensitivity is more evident in the car insurance market
- Appreciation of getting value for money increases with age
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- Figure 80: Good value for money vs. cheapest available price (total of responses across all categories), by age group, August 2011
- Lack of trust is more likely to drive price-driven purchasing behaviour
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- Figure 81: Purchasing considerations, by attitudes towards general insurance, August 2011
- Extensive policy coverage appeals across the financial health spectrum
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- Figure 82: Purchasing considerations, by current financial situation, August 2011
Targeting Opportunities
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- Key points
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- Figure 83: Target groups based on attitudes towards buying general insurance products, August 2011
- Price sensitive
- Taking the middle ground
- Discerning quality seekers
- It’s all about value
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- Figure 84: Purchasing considerations, by target groups, August 2011
Appendix – Consumer Sentiment
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- Figure 85: Current financial situation, by demographics, August 2011
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- Figure 86: Financial confidence for the next 12 months, by demographics, August 2011
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Appendix – Brand Research
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- Figure 87: Brand usage, October 2011
- Figure 88: Brand commitment, October 2011
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- Figure 89: Brand momentum, October 2011
- Figure 90: Brand diversity, October 2011
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- Figure 91: Brand satisfaction, October 2011
- Figure 92: Brand recommendation, October 2011
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- Figure 93: Brand attitude, October 2011
- Figure 94: Brand image – macro image, October 2011
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- Figure 95: Brand image – micro image, October 2011
- Figure 96: Profile of target groups, by demographics, October 2011
- Figure 97: Psychographic segmentation by target group, October 2011
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- Figure 98: Brand usage by target groups, October 2011
- Figure 99: Brand index, October 2011
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Appendix –Consumer Financial Priorities
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- Figure 100: Consumer financial priorities, by demographics, August 2011
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- Figure 101: Consumer financial priorities (continued), by demographics, August 2011
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Appendix – General Insurance Product Ownership
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- Figure 102: Most popular general insurance product ownership, by demographics, August 2011
- Figure 103: Next most popular general insurance product ownership, by demographics, August 2011
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- Figure 104: Other general insurance product ownership, by demographics, August 2011
- Figure 105: General insurance product ownership repertoire, by demographics, August 2011
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Appendix – Shoparound and Cancellation Behaviour
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- Figure 106: Renewal behaviour and attitudes, by demographics, August 2011
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Appendix – Attitudes Towards General Insurance
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- Figure 107: Attitudes towards general insurance, by demographics, August 2011
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Appendix –Buying Behaviour and Approach to Cover
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- Figure 108: Buying behaviours and approach to cover, by demographics, August 2011
- Figure 109: Buying behaviours and approach to cover (continued), by demographics, August 2011
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Appendix – Purchasing Considerations
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- Figure 110: Purchasing considerations (total across all featured categories), by demographics, August 2011
- Figure 111: Purchasing considerations continued (total across all categories), by demographics, August 2011
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Appendix – Targeting Opportunities
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- Figure 112: Target groups, by demographics, August 2011
- Figure 113: General insurance product ownership, by target groups, August 2011
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- Figure 114: Current financial situation, by target groups August 2011
- Figure 115: Financial confidence for the next 12 months, by target groups, August 2011
- Figure 116: Consumer financial priorities, by target groups, August 2011
- Figure 117: Attitudes towards general insurance, by target groups, August 2011
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- Figure 118: Buying behaviours and approach to cover, by target groups, August 2011
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