Table of Contents
Introduction
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- Market definitions
- Note on consumer research
- Abbreviations
Executive Summary
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- The market
- One in four owns five or more different types of insurance cover
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- Figure 1: General insurance product ownership, August 2012
- General insurance premiums increased by 5% in 2011
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- Figure 2: NWP, total outgoings, net claims and underwriting result for UK annual general business, 2007-11
- Market factors
- A challenging economic backdrop and a plethora of regulatory changes
- Companies, brands and innovation
- Aviva takes over as leading UK general insurance underwriter
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- Figure 3: Largest general insurers/reinsurers – total market (direct and facultative business), by GWP, 2011
- Adspend continued to fall in 2011/12
- The consumer
- Online channels dominate but offline channels still have a role to play
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- Figure 4: Channels used to arrange insurance, August 2012
- Price comparison sites are seen as convenient but lack accuracy
- Telephone services are the preferred option when making a claim or policy amendments
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- Figure 5: Channel preferences for different insurance-related activities, August 2012
- The majority shop around at their insurance renewal
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- Figure 6: Approaches to renewing insurance cover, August 2012
- Cost, cover and UK call-centres are all seen as important considerations
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- Figure 7: Purchasing considerations by importance, August 2012
- 50% of all insurance policyholders are looking to reduce their insurance expenditure
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- Figure 8: Attitudes towards spending on general insurance products, August 2012
- What we think
Issues in the Market
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- To what extent are consumers trying to reduce the amount they spend on insurance cover?
- Is brand an important consideration when arranging insurance cover?
- How can insurers compete with price comparison sites?
- Do face-to-face channels still have a role to play in insurance distribution?
Trend Application
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- Time saving devices for multi-product owners
- Promoting Brand Britannia
- Providing a seamless, multi-channel service
Market Environment
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- Key points
- Challenging economy creates a more price sensitive consumer
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- Figure 9: UK GDP growth – percentage change, latest quarter on previous quarter, 2009-12
- Motor insurance premiums fall, but home insurance premiums are rising
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- Figure 10: AA British Insurance Premium Index market average trends, April 2009-October 2012
- Weather-related claims remain a concern for property insurers
- Regulatory and legislative issues
- Market gearing up for implementation of EU gender ruling
- Ban on referral fees on the horizon
- Competition under the microscope
- Solvency II delayed again
- FSA clamps down on sale of bundled insurance products
- FSA to monitor sale of low cost insurance policies
General Insurance Market Size
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- Key points
- General insurance premiums rise again
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- Figure 11: Summary of annual general insurance business – UK risks, by sector NWPs, 2007-11
- Motor insurance premiums up by 10% in 2011
- Property premiums rise following adverse weather conditions
- General insurance market returned to underwriting profit in 2011
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- Figure 12: UK outgo and underwriting result for annual general insurance business, 2007-11
- Improvements in both motor and property underwriting ratio
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- Figure 13: Underwriting ratio – UK annual general insurance business by sector, 2007-11
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- Figure 14: Claims ratio – UK annual general insurance business, by sector, 2007-11
Market Segmentation
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- Key points
- Private motor accounted for 29% of total premium income in 2011
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- Figure 15: Share of premium income (UK annual business), by sector, 2011
- Pet insurance premiums rise, but travel premiums fall
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- Figure 16: Premium analysis of UK general insurance business, 2006-07-2010-11
Underwriter Share
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- Key points
- Aviva takes over as the leading UK general insurance underwriter
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- Figure 17: Largest general insurers/reinsurers – total market (direct and facultative business), by GWP, 2009-11
Companies and Products
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- Aviva
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- Figure 18: Key financial data for Aviva UK General Insurance business, H1 2011-H1 2012
- Figure 19: Key financial data for Aviva UK General Insurance business, 2010-11
- AXA Insurance
- Chartis Insurance (AIG)
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- Figure 20: Key financial data for Chartis (AIG) UK, 2010-11
- Direct Line Group (formerly RBS Insurance)
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- Figure 21: Key financial data for Direct Line Group, H1 2011-H1 2012
- Figure 22: Key financial data for RBS Insurance*, 2010-11
- RSA Insurance
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- Figure 23: Key financial data for RSA UK Insurance, H1 2011-H1 2012
- Figure 24: Key financial data for RSA UK Insurance, 2010-11
Brand Communication and Promotion
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- Key points
- Adspend on general insurance products fell by 1.4% in 2011/12
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- Figure 25: Topline adspend for general insurance products, 2009/10-2011/12
- Car insurance dominates the market
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- Figure 26: Adspend, by general insurance category, 2009/10-2011/12
- TV advertising is the most popular channel for insurance adspend
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- Figure 27: General insurance adspend, by media type, 2009/10-2011/12
- Majority of top 20 insurers increased adspend over last 12 months
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- Figure 28: Top 20 general insurance advertisers, 2009/10-2011/12
General Insurance Product Ownership
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- Key points
- Most consumers have experience of general insurance market
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- Figure 29: General insurance product ownership, August 2012
- Appetite for risk is lower among older consumers
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- Figure 30: Responses to statements about risk and insurance, by age group, 2012
- Cover for technology could help to engage the young
- One in four have five or more types of general insurance cover
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- Figure 31: General insurance product ownership, by number of products held, August 2012
- Figure 32: General insurance product ownership, by general insurance product ownership, August 2012
- Online tools to help multiple product holders
Channels Used to Arrange General Insurance Products
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- Key points
- Price comparison sites tighten grip on general insurance market…
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- Figure 33: Channels used to arrange selected insurance products, August 2012
- …although offline channels still have a role to play
- Younger adults are more likely than average to use face-to-face channels
Attitudes Towards Channels of Distribution
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- Key points
- Price comparison sites are seen as the most convenient channel…
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- Figure 34: Channel associations, August 2012
- …but insurer websites lead the way when it comes to accuracy
- Brokers associated with reassurance and expertise
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- Figure 35: Correspondence analysis – attitudes towards channels of distribution, August 2012
- Insurers have an edge in terms of reliability and trust
Channel Preferences for Managing General Insurance Policies
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- Key points
- Consumers seek a multi-channel approach to managing insurance cover
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- Figure 36: Channel preferences for different insurance-related activities, August 2012
- Higher income groups are the most inclined to use online channels
- Making a claims remains a personal service
Approaches to Renewing General Insurance Products
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- Key points
- Shopping around at renewal is now commonplace
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- Figure 37: Approaches to renewing insurance cover, August 2012
- Consumers see little reward in being loyal
- Insurance switchers are driven by price
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- Figure 38: Reasons for switching car or home insurance, May 2012
- Is there any degree of loyalty left?
- Channel preference is linked to loyalty
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- Figure 39: Approaches to renewing insurance cover, by channels used to arrange insurance, August 2012
Insurance Provider Selection
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- Key points
- Striking a balance between cost and cover
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- Figure 40: Purchasing considerations by importance, August 2012
- UK-based call centres are a bigger consideration than brand
- Under 35s are more likely to look for provider recommendations
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- Figure 41: Proportion of respondents that feel recommendations are an important insurance purchasing consideration, by age group, August 2012
- Loyal policyholders are more likely to select provider based on brand
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- Figure 42: Importance of purchasing considerations, by approaches to renewing insurance cover, August 2012
Attitudes Towards Spending on General Insurance Products
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- Key points
- Almost 50% of policyholders are looking to reduce their insurance spend
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- Figure 43: Attitudes towards spending on general insurance products, August 2012
- Shopping around for a cheaper deal
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- Figure 44: Approaches to renewing insurance cover, attitudes towards spending on general insurance products, August 2012
- Quality seekers need to see added value
- Value chasers are more inclined to move providers mid-term
- Multiple product owners are more demanding
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- Figure 45: Attitudes towards spending on general insurance products, by general insurance product ownership, August 2012
- Brand is more likely to be a consideration for those seeking reassurance
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- Figure 46: Importance of purchasing considerations, by attitudes towards spending on general insurance products, August 2012
Appendix – General Insurance Product Ownership
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- Figure 47: Most popular general insurance product ownership, by demographics, August 2012
- Figure 48: Next most popular general insurance product ownership, by demographics, August 2012
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- Figure 49: Other general insurance product ownership, by demographics, August 2012
- Figure 50: General insurance product ownership repertoire analysis (number of products held), by demographics, August 2012
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Appendix – Channels Used to Arrange General Insurance Products
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- Figure 51: Channels used to arrange insurance, August 2012
- Figure 52: Channels used to arrange car insurance, by demographics, August 2012
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- Figure 53: Channels used to arrange home contents insurance, by demographics, August 2012
- Figure 54: Channels used to arrange buildings insurance, by demographics, August 2012
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- Figure 55: Channels used to arrange annual travel insurance, by demographics, August 2012
- Figure 56: Channels used to arrange medical/health insurance, by demographics, August 2012
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- Figure 57: Channels used to arrange pet insurance, by demographics, August 2012
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Appendix – Attitudes Towards Channels of Distribution
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- Figure 58: Top five price comparison websites for channel associations, by demographics, August 2012
- Figure 59: Top five insurer websites for channel associations, by demographics, August 2012
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- Figure 60: Top five insurer telephone services for channel associations, by demographics, August 2012
- Figure 61: Top five broker face-to-face or telephone services for channel associations, by demographics, August 2012
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Appendix – Channel Preferences for Managing General Insurance Policies
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- Figure 62: Channel preferences for researching a new policy, by demographics, August 2012
- Figure 63: Channel preferences for purchasing a new policy, by demographics, August 2012
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- Figure 64: Channel preferences for query policy details, by demographics, August 2012
- Figure 65: Channel preferences for renewing an existing policy, by demographics, August 2012
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- Figure 66: Channel preferences for amendments/change to an existing policy, by demographics, August 2012
- Figure 67: Channel preferences for cancelling a policy, by demographics, August 2012
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- Figure 68: Channel preferences for making a claim, by demographics, August 2012
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Appendix – Approaches to Renewing General Insurance Products
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- Figure 69: Approaches to renewing insurance cover, by demographics, August 2012
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Appendix – Insurance Provider Selection
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- Figure 70: Importance of the cost of cover, by demographics, August 2012
- Figure 71: Importance of a well-known brand, by demographics, August 2012
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- Figure 72: Importance of a quick and easy application process, by demographics, August 2012
- Figure 73: Importance of a recommendation from family/friends, by demographics, August 2012
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- Figure 74: Importance of positive feedback/recommendation on online forums and social media, by demographics, August 2012
- Figure 75: Importance of the quality of cover provided, by demographics, August 2012
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- Figure 76: Importance of rewards for loyalty, by demographics, August 2012
- Figure 77: Importance of UK-based call centres, by demographics, August 2012
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Appendix – Attitudes Towards Spending on General Insurance Products
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- Figure 78: General insurance product ownership, attitudes towards spending on general insurance products, August 2012
- Figure 79: Attitudes towards spending on general insurance products, August 2012
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