Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The market
- Gross premiums to maintain their steady ascent
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- Figure 1: Gross written domestic property insurance premiums – fan chart, 2007-17
- Sector split
- Majority of policies sold via independent intermediaries or bancassurance
- Market factors
- New business growth hindered by the weak economy
- Weather-related risks continue to push up home insurance premiums
- Number of claims in ongoing decline but their value still growing slightly
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- Figure 2: Total number of domestic property claims and cost incurred, 2006-11
- Companies, brands and innovation
- RBS and Lloyds Banking Group account for 30% of market share
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- Figure 3: Top ten domestic property insurance parent groups, by GWP, 2011
- Home insurance adspend creeps up in 2012
- New technology and regulation spur on innovation
- The consumer
- Seven in ten UK adults own a home insurance product
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- Figure 4: Ownership of home insurance and related products, August 2012
- Two thirds stayed with their provider at last renewal
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- Figure 5: Action taken at last home insurance policy renewal, August 2012
- Price comparison site usage is widespread but many arrange cover elsewhere
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- Figure 6: Channel used when obtaining home insurance quotations, August 2012
- Obtaining 3 to 5 quotes is the norm
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- Figure 7: Number of quotes obtained when shopping around for a home insurance policy, August 2012
- Quality and cost of cover take priority over brand name
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- Figure 8: Importance of home insurance product features, August 2012
- What we think
Issues in the Market
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- How can home contents policy ownership be expanded further?
- Is not appearing on price comparison websites a good strategy?
- Does shopping around lead to increased switching activity?
- With competition increasingly price driven, does brand matter anymore?
Trend Application
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- Being under or overinsured set to be a thing of the past
- DIY and furniture retailers well positioned to enter home insurance market
- Extreme weather risks call for ongoing insurer-government collaboration
Market Drivers
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- Key points
- Weak economy and housing market hinder growth in new business
- Buildings and contents premiums set to continue rising…
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- Figure 9: Average home insurance market and shoparound* premiums (quarterly basis), January 2006-July 2012
- … with the cost of buildings premiums growing ahead of contents
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- Figure 10: RPI and consumer durables index, January 2006-April 2012
- … but demand for contents is far more elastic
- Premiums may rise so those in flood prone areas can obtain cover
- Claim numbers in decline but the overall value of claims remain steady
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- Figure 11: Total number of domestic property claims and cost incurred, 2006-11and 2011 H1-2012 H1
- Escape of water and weather main sources of claim activity
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- Figure 12: Proportional distribution of domestic property claims, by type of peril, 2008 -11 and H1 2012
- Domestic property fraud detection lags behind overall industry
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- Figure 13: Detected general insurance fraud, by claims value, 2006-11
- ABI forging partnerships to further improve fraud detection
SWOT Analysis
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- Figure 14: UK domestic property insurance market – SWOT analysis, 2012
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Who’s Innovating?
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- Key points
- L&G launches “Interactive House”
- Zombies and virtual burglaries
- Quotemehappy.com releases smartphone app
- Virtual catalogues
Market Size and Forecast
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- Key points
- Gross premiums rise to £6.9 million in 2011
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- Figure 15: Gross and net written premiums – domestic property insurance, 2001-12
- Premiums expected to continue rising in 2012
- Sector segmentation
- Domestic property market turns a 9% underwriting profit in 2011
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- Figure 16: Domestic property insurance underwriting ratio, 2001-11
- Net claims fall by 11%
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- Figure 17: Gross and net written premiums – domestic property insurance, 2006-11
- Five-year forecast
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- Figure 18: Gross written domestic property insurance premiums – fan chart, 2007-17
- Figure 19: Forecast of gross written premiums – domestic property insurance, 2007-17
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- RBS Group and Lloyds Banking Group a close first and second
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- Figure 20: Largest 15 parent groups active in the domestic property market, by GWP, 2011
- Strong growth at Ageas Group moves it up in the rankings
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- Figure 21: Top eight domestic property insurance parent groups, by GWP, 2009-11
Companies and Products
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- Direct Line Group
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- Figure 22: Key financial data for RBS Insurance Group, 2010 and 2011
- Figure 23: Key financial data for Direct Line Group, H1 2011 and H1 2012
- Lloyds Banking Group
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- Figure 24: Key financial data for Lloyds Banking Group (general insurance), 2010 and 2011
- Figure 25: Key financial data for Lloyds Banking Group (general insurance), H1 2011 and H1 2012
- Aviva
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- Figure 26: Key financial data for Aviva (UK general insurance), 2010 and 2011
- Figure 27: Key financial data for Aviva (UK general insurance), H1 2011 and H1 2012
- RSA Insurance
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- Figure 28: Key financial data for RSA (UK personal, Household), 2010 and 2011
- Figure 29: Key financial data for RSA (UK personal, household), H1 2011 and H1 2012
- AXA
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- Figure 30: Key financial data for AXA (UK and Ireland, Property & Casualty), 2010 and 2011
- Figure 31: Key financial data for AXA (UK and Ireland, Property & Casualty), H1 2011 and H1 2012
Brand Communication and Promotion
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- Key points
- After decline of several years, home insurance adspend creeps up in 2012
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- Figure 32: Topline advertising expenditure on home insurance, 2008-12
- Direct mail and TV the key advertising media
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- Figure 33: Advertising expenditure on home insurance, by media type, 2010-12
- Direct Line Group companies dominate adspend
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- Figure 34: Top 15 advertisers of home insurers, 2010-12
Brand Research
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- Brand map
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- Figure 35: Attitudes towards and usage of brands operating in the home insurance market, August 2012
- Correspondence analysis
- Brand attitudes
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- Figure 36: Attitudes by brands operating in the home insurance market, August 2012
- Brand personality
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- Figure 37: Brand personality of brands operating in the home insurance market – macro image, August 2012
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- Figure 38: Brand personality of brands operating in the home insurance market – micro image, August 2012
- Brand experience
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- Figure 39: Brand usage for brands operating in the home insurance market, August 2012
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- Figure 40: Satisfaction with various brands operating in the home insurance market, August 2012
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- Figure 41: Consideration of brands operating in the home insurance market, August 2012
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- Figure 42: Consumer perceptions of brand performance for brands operating in the home insurance market, August 2012
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- Figure 43: Brand recommendation for brands operating in the home insurance market – Net Promoter Score, August 2012
- Brand index
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- Figure 44: Brand index for brands operating in the home insurance market, August 2012
- Figure 45: Brand index vs. recommendation for brands operating in the home insurance market, August 2012
- Target group analysis
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- Figure 46: Target groups, August 2012
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- Figure 47: Brand usage of brands operating in the home insurance market, by target groups, August 2012
- Group One – Conformists
- Group Two – Simply the Best
- Group Three – Shelf Stalkers
- Group Four – Habitual Shoppers
- Group Five – Individualists
Channels to Market
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- Key points
- Internet users more likely to buy via price comparison sites than direct
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- Figure 48: Method of arranging home insurance policies, August 2012
- Strategy to appearing on web aggregators varies by provider/brand
- Most policies sold via Independent intermediaries or bancassurance
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- Figure 49: Domestic property insurance sales (GWP), by distribution channel, 2006-10
Home Insurance Ownership
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- Key points
- 7 in 10 own a home insurance product
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- Figure 50: Ownership of home insurance and other types of general insurance, August 2012
- Plenty of room to expand contents insurance ownership among renters
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- Figure 51: Ownership of home ownership and related products, by housing tenure, August 2011
- Ownership levels rise sharply after the age of 35
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- Figure 52: Ownership of home insurance products, by age, August 2012
- An opportunity to boost home contents ownership among under-35s
Buying Behaviour
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- Key points
- More than three fifths use price comparison websites to shop around
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- Figure 53: Channel used when obtaining home insurance quotations, August 2012
- Consumers most commonly obtain three to five quotes
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- Figure 54: Number of quotes obtained when shopping around for a home insurance policy, August 2012
- Nearly a quarter of comparison site users obtained more than 10 quotes
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- Figure 55: Number of quotes obtained when shopping for around for a home insurance policy, by channel used to obtain quotes, August 2012
- Use of aggregators does not mean people have stopped buying direct
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- Figure 56: Method used to arrange home insurance, August 2012
- Men and those younger than 54 most likely to use aggregator websites
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- Figure 57: Channel used when obtaining home insurance quotations, by typical demographic profile of user, August 2012
Policy Renewal and Switching Activity
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- Key points
- Two thirds stayed with existing provider at last renewal
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- Figure 58: Action taken at last home insurance policy renewal, August 2012
- Shopping around does not necessarily increase switching activity
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- Figure 59: Action taken at last home insurance policy renewal, by number of quotes obtained when shopping for around for a home insurance policy, August 2012
- … but premium increases surely do
- Over half experienced a premium increase at last renewal…
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- Figure 60: Price of initial renewal quotation, August 2012
- …and over half of those who switched insurer saw an increase
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- Figure 61: Price of initial renewal quotation by action taken at last home insurance policy renewal, August 2012
- Home owners and the affluent more inclined to shop around
Most Valued Home Insurance Policy Features
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- Key points
- Quality of cover the main focal point of consumers
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- Figure 62: Importance of home insurance product features*, August 2012
- Quality and cost of cover take precedence over brand name
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- Figure 63: Importance of home insurance product features, August 2012
- Brands more important to women than men
- Two thirds agree cover for items outside the home is important
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- Figure 64: Importance of home insurance product features, August 2012
- Affluent more likely to be paying attention to what’s covered
- Three in five say online policy management is an essential feature
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- Figure 65: Importance of home insurance product features, August 2012
- Interactive technology will help to improve customer satisfaction
Appendix – Market Size and Forecast
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- Figure 66: Best case/worse case forecast of gross written premiums – domestic property insurance, 2012-17
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Appendix – Brand Research
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- Figure 67: Brand usage, August 2012
- Figure 68: Brand commitment, August 2012
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- Figure 69: Brand momentum, August 2012
- Figure 70: Brand diversity, August 2012
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- Figure 71: Brand satisfaction, August 2012
- Figure 72: Brand recommendation, August 2012
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- Figure 73: Brand attitude, August 2012
- Figure 74: Brand image – Macro image, August 2012
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- Figure 75: Brand image – Micro image, August 2012
- Figure 76: Profile of target groups, by demographics, August 2012
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- Figure 77: Psychographic segmentation by target groups, August 2012
- Figure 78: Brand usage, by target groups, August 2012
- Brand index
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- Figure 79: Brand index, August 2012
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Appendix – Home Insurance Ownership
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- Figure 80: Ownership of home insurance and other types of general insurance, by home insurance ownership, August 2012
- Figure 81: Ownership of home insurance, by demographics, August 2012
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Appendix – Buying Behaviour
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- Figure 82: Channels used to obtain home insurance quotations, by demographics, August 2012
- Figure 83: Number of quotes obtained when shopping for around for a home insurance policy, by demographics, August 2012
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Appendix – Policy Renewal and Switching Activity
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- Figure 84: Renewal experience, by demographics, August 2012
- Figure 85: Renewal premium experience, by demographics, August 2012
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Appendix – Most Valued Home Insurance Policy Features
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- Figure 86: Importance of low price as a home insurance product feature, by demographics, August 2012
- Figure 87: Importance of good level of cover as a home insurance product feature, by demographics, August 2012
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- Figure 88: Importance of well-known brand as a home insurance product feature, by demographics, August 2012
- Figure 89: Importance ability to manage policy online as a home insurance product feature, by demographics, August 2012
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- Figure 90: Importance of items covered under the policy would be replaced based on the cost of an equivalent ‘new’ item as a home insurance product feature, by demographics, August 2012
- Figure 91: Importance of no claims discount as a home insurance product feature, by demographics, August 2012
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- Figure 92: Importance of cover for pedal cycles as a home insurance product feature, by demographics, August 2012
- Figure 93: Importance of cover for valuables as a home insurance product feature, by demographics, August 2012
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- Figure 94: Importance of cover for items outside the home as a home insurance product feature, by demographics, August 2012
- Figure 95: Importance of accidental damage cover as a home insurance product feature, by demographics, August 2012
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