Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The market
- Steady rise in gross written premiums set to resume
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- Figure 1: Gross written domestic property insurance premiums – fan chart, 2008-18
- Sector segmentation
- Three-fifths of policies sold via intermediaries and bancassurance
- Market factors
- Improvement in economic performance and housing market
- Home insurance premiums have softened but remain susceptible to sudden rises
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- Figure 2: Average home insurance market and shoparound* premiums (quarterly basis), October 2009-October 2013
- Number of claims continues to fall but average values have risen by 9% since 2007
- Companies, brands and innovation
- Direct Line Group, LBG and Aviva in a close battle for the top spot in the market
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- Figure 3: Top five domestic property insurance parent groups, by GWP, 2012
- Aviva and Direct Line are the most trusted brands
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- Figure 4: Attitudes towards and usage of brands in the home insurance sector, July 2013
- Home insurance adspend down by 21% in 2013
- Provider innovations and developments
- The consumer
- Three in four adults own a home insurance product
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- Figure 5: Ownership of home insurance and other types of general insurance, September 2013
- More use price comparison sites for researching than for purchasing
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- Figure 6: Channels used to research and arrange a home insurance policy, September 2013
- Most choose providers based upon which can provide the cheapest quote
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- Figure 7: Important factors when choosing a home insurance provider, September 2013
- The vast proportion of consumers prefer contents cover for all their belongings
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- Figure 8: Home insurance policy preferences, September 2013
- Three in 10 switched providers at last renewal
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- Figure 9: Action taken at last home insurance policy renewal, September 2013
- Switching less likely if customers feel they’re getting a fair deal
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- Figure 10: Reasons for staying with existing provider after shopping around, September 2013
- What we think
Issues in the Market
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- What’s behind the softening in home insurance premiums and will it last?
- How can contents insurance ownership among renters be expanded?
- Which channels give providers the best chance of a sale?
- What can providers do to reduce switching activity?
Trend Application
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- When spending a little bit more gets you a lot more
- One provider is better than many
- The home insurance claims process is going mobile
Market Drivers
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- Key points
- Signs of life in the economy and housing market
- Buildings and contents premiums softening…
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- Figure 11: Average home insurance market and shoparound* premiums (quarterly basis), October 2009-October 2013
- …but how long will this last?
- Contents policy pricing is more consistent but demand is variable
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- Figure 12: RPI and consumer durables index, 2000-12
- Subsidised insurance for high flood risk areas set to push up premiums
- Number of claims continues to fall
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- Figure 13: Total number of domestic property claims and cost incurred, 2007-12
- Weather-related claims increase in 2012
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- Figure 14: Proportional distribution of domestic property claims, by type of peril, 2009-H1 2013
- St Jude’s storm will push up weather related claims in H2 2013
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- Figure 15: Detected general insurance fraud, by claims value, 2007-12
- Fraud detection on the rise
Who’s Innovating?
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- Key points
- L&G joins ‘Bought by Many’ to offer discount premiums to customers
- L&G launches home insurance for mid- and high-net-worth customers
- British Gas enters the home insurance market
- Zurich launches app for home insurance customers
Market Size and Forecast
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- Key points
- Gross premiums stagnate in 2012
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- Figure 16: Gross and net written premiums – domestic property insurance, 2002-13
- A modest rise in gross premiums expected for 2013
- Sector split
- Industry generates a 3.5% underwriting profit in 2012…
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- Figure 17: Domestic property insurance underwriting ratio, 2002-12
- …despite a 5% rise in net claims costs
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- Figure 18: Gross and net written premiums – domestic property insurance, 2007-12
- Market forecast
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- Figure 19: Gross written domestic property insurance premiums – fan chart, 2008-18
- Figure 20: Forecast of gross written premiums – domestic property insurance, 2008-18
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Direct Line Group the top home insurance provider
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- Figure 21: Largest 15 parent groups active in the domestic property market, by GWP, 2012
- AXA and L&G gain market share in 2012
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- Figure 22: Top eight domestic property insurance parent groups, by GWP, 2011-12
Companies and Products
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- Direct Line Group
- Company description
- 2012 position in the domestic home market
- Home insurance product range
- Distribution
- Recent financial performance
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- Figure 23: Key financial data for Direct Line Group (Home), 2011 and 2012
- Figure 24: Key financial data for Direct Line Group (Home), H1 2012 and H1 2013
- Recent activity
- Lloyds Banking Group
- Company description
- 2012 position in the domestic home market
- Home insurance product range
- Distribution
- Recent financial performance
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- Figure 25: Key financial data for Lloyds Banking Group (General Insurance), 2011 and 2012
- Figure 26: Key financial data for Lloyds Banking Group (General Insurance), H1 2012 and H2 2013
- Recent activity
- Aviva
- Company description
- 2012 position in the domestic home market
- Home insurance product range
- Distribution
- Recent financial performance
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- Figure 27: Key financial data for Aviva (UK and Ireland general insurance), 2011 and 2012
- Figure 28: Key financial data for Aviva (UK and Ireland general insurance), H1 2012 and H1 2013
- Recent activity
- RSA Group
- Company description
- 2012 position in the domestic home market
- Home insurance product range
- Distribution
- Recent financial performance
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- Figure 29: Key financial data for RSA (UK personal, household), 2011 and 2012
- Figure 30: Key financial data for RSA (UK personal, household), H1 2012 and H1 2013
- Recent activity
- AXA UK
- Company description
- 2012 position in the domestic home market
- Home insurance product range
- Distribution
- Recent financial performance
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- Figure 31: Key financial data for AXA (UK and Ireland, property and casualty), 2011 and 2012
- Figure 32: Key financial data for AXA (UK and Ireland, property and casualty), H1 2012 and H1 2013
- Recent activity
Brand Research
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- Brand map
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- Figure 33: Attitudes towards and usage of brands in the home insurance sector, July 2013
- Correspondence analysis
- Brand attitudes
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- Figure 34: Attitudes, by home insurance brand, July 2013
- Brand personality
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- Figure 35: Home insurance brand personality – macro image, July 2013
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- Figure 36: Home insurance brand personality – micro image, July 2013
- Brand experience
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- Figure 37: Home insurance brand usage, July 2013
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- Figure 38: Satisfaction with various home insurance brands, July 2013
- Figure 39: Consideration of home insurance brands, July 2013
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- Figure 40: Consumer perceptions of current home insurance brand performance, July 2013
- Brand index
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- Figure 41: Home insurance brand index, July 2013
- Target group analysis
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- Figure 42: Target groups, July 2013
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- Figure 43: Home insurance brand usage, by target groups, July 2013
- 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
- Home insurance adspend declines in 2013
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- Figure 44: Topline advertising expenditure on home insurance, 2009-13
- TV advertising has been cut in half
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- Figure 45: Advertising expenditure on home insurance, by media type, 2011-13
- Direct Line reduces adspend by £10 million but remains the top advertiser
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- Figure 46: Top 15 advertisers of home insurance, 2011-13
- Note about NMR data
Channels to Market
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- Key points
- Price comparison websites the most popular way to arrange a policy
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- Figure 47: Channels used to arrange a home insurance policy, September 2013
- Providers taking a varied approach to price comparison sites
- A third of policies sold via intermediaries
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- Figure 48: Domestic property insurance sales (GWP), by distribution channel, 2008-12
Home Insurance Ownership
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- Key points
- Three quarters of adults own a home insurance product
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- Figure 49: Ownership of home insurance and other types of general insurance, September 2013
- Home contents insurance ownership directly tied to tenure
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- Figure 50: Ownership of home insurance and related products, by tenure, September 2013
- Raising home contents insurance ownership among renters
- Room to expand home insurance ownership among under-35s
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- Figure 51: Home insurance ownership, by gender, age, socio-economic group and gross annual household income, September 2013
Researching and Purchasing Home Insurance
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- Key points
- Three in four use the internet to research home insurance
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- Figure 52: Channels used to research home insurance, September 2013
- Nearly three in five policies arranged via an online channel
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- Figure 53: Channels used to arrange a home insurance policy, September 2013
- Offline channels provide the best chance for a sale
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- Figure 54: Comparison of channels used to research and purchase home insurance, September 2013
- The case for staying off price comparison websites
- Three in 10 who use a price comparison site for research buy direct
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- Figure 55: Channels used to arrange home insurance, by channels used to research home insurance, September 2013
Important Factors when Choosing a Home Insurance Provider
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- Key points
- The cheapest quote the deciding factor for two thirds of customers
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- Figure 56: Important factors when choosing a home insurance provider, September 2013
- Younger consumers more likely to be influenced by the cheapest quote...
- …while older customers are more heavily tied to well-known brands
- Those buying direct more likely to consider other factors than just price
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- Figure 57: Important factors when choosing a home insurance provider, by channel used to arrange home insurance, September 2013
- Overwhelming preference for contents policies that provide full coverage
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- Figure 58: Home contents insurance policy preferences, September 2013
- Technological innovations will help to ensure proper levels of coverage
Policy Renewal and Switching Activity
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- Key points
- Three in 10 switched providers at renewal
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- Figure 59: Action taken at last home insurance policy renewal, September 2013
- Homeowners more likely than renters to have switched
- Few consumers are loyal to just one brand
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- Figure 60: Provider loyalty, September 2013
- If the price is right customers are likely to stick around
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- Figure 61: Reasons for staying with existing provider after shopping around, September 2013
Appendix – Market Size and Forecast
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- Figure 62: Best case/worse case forecast of gross written premiums – domestic property insurance, 2013-18
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Appendix – Brand Research
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- Figure 63: Brand usage, July 2013
- Figure 64: Brand commitment, July 2013
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- Figure 65: Brand momentum, July 2013
- Figure 66: Brand diversity, July 2013
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- Figure 67: Brand satisfaction, July 2013
- Figure 68: Brand attitude, June 2013
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- Figure 69: Brand image – macro image, July 2013
- Figure 70: Brand image – micro image, July 2013
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- Figure 71: Profile of target groups, by demographics, July 2013
- Figure 72: Psychographic segmentation by target groups, July 2013
- Figure 73: Brand usage, by target groups, July 2013
- Brand index
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- Figure 74: Brand index, July 2013
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Appendix – Home Insurance Ownership
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- Figure 75: Ownership of home insurance and related products, by demographics, September 2013
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Appendix – Researching and Purchasing Home Insurance
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- Figure 76: Most popular channels used to research home insurance, by demographics, September 2013
- Figure 77: Next most popular channels used to research home insurance, by demographics, September 2013
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- Figure 78: Most popular channels used to arrange a home insurance policy, by demographics, September 2013
- Figure 79: Next most popular channels used to arrange a home insurance policy, by demographics, September 2013
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Appendix – Important Factors when Choosing a Home Insurance Provider
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- Figure 80: Important factors when choosing a home insurance provider, by demographics, September 2013
- Figure 81: Important factors when choosing a home insurance provider, by demographics, September 2013 (continued)
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- Figure 82: Home insurance policy preferences, by demographics, September 2013
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Appendix – Policy Renewal and Switching Activity
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- Figure 83: Action taken at last home insurance policy renewal, by demographics, September 2013
- Figure 84: Action taken at last home insurance policy renewal, by demographics, September 2013 (continued)
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- Figure 85: Most popular reasons for staying with existing provider after shopping around, by demographics, September 2013
- Figure 86: Next most popular reasons for staying with existing provider after shopping around, by demographics, September 2013
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- Figure 87: Provider loyalty, by demographics, September 2013
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