Table of Contents
Introduction
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- Report scope and market definitions
- Note on consumer research
- Abbreviations
Executive Summary
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- The market
- Personal lines GWP declined slightly in 2012
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- Figure 1: General insurance revenue – retail products – UK risks, by GWP, 2008-12
- Private motor insurance accounts for 40% of personal lines GWP
- Only one in 10 have no form of general insurance cover
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- Figure 2: General insurance product ownership, September 2013
- Ownership of some discretionary forms of insurance is likely to fall
- Companies, brands and innovation
- Post office leads the way in terms of trust and differentiation
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- Figure 3: Attitudes towards and use of brands in the insurance sector, October 2013
- Aviva was the leading personal lines general insurance underwriter in 2012
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- Figure 4: Largest personal lines underwriters, by GWP, 2012
- Consumer purchasing patterns
- Shopping around is now normal practice
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- Figure 5: Behaviour at last policy renewal, September 2013
- Around half of policyholders shop around to check competitiveness of renewal quote
- Intentions to shop around at next renewal are highest among newer policyholders
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- Figure 6: Proportion who are likely to shop around at next policy renewal, September 2013
- Policyholders prefer rewards for how long a product is held than multi-product discounts
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- Figure 7: Interest in incentives to encourage loyalty to an insurance provider, September 2013
- Consumer attitudes
- Three in 10 find arranging insurance is a hassle
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- Figure 8: Attitudes towards general insurance, September 2013
- Policyholders are divided over level of trust in insurers
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- Figure 9: Consumer trust in general insurance providers, September 2013
- What we think
Issues and Insights
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- Playing on people’s natural fear of losing out can reduce churn
- The facts
- The implications
- Multi-product discount schemes have a limited appeal
- The facts
- The implications
- Customer retention schemes have a short space of time to make an impact
- The facts
- The implications
- Tackling uncertainty to improve levels of trust
- The facts
- The implications
Trend Application
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- Celebrate rather than deter shoparound behaviour
- Helping people to understand their insurance needs
- Insurers will need to rethink their strategy for cross-selling to the over-55s
Market Size
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- Key points
- Gross written premiums contracted by 3% in 2012
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- Figure 10: General insurance revenue – retail products – UK risks, by GWP, 2008-12
- Underwriting profits decline but the general insurance market is still in the black
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- Figure 11: General insurance – retail products – UK outgo and underwriting result, 2008-12
Market Segmentation
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- Key points
- Motor insurance accounts for around two fifths of total GI income
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- Figure 12: Share of premium income, by sector, UK general insurance retail products, 2012
- Motor insurance sector closes in on underwriting profitability…
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- Figure 13: Underwriting ratio – UK general insurance retail products, 2008-12
- …as claim costs are brought under control
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- Figure 14: Claims ratio – UK general insurance retail products, 2008-12
Underwriter Share
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- Key points
- Aviva is the top personal lines underwriter
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- Figure 15: Largest personal lines underwriters, by GWP, 2010-12
Companies and Products
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- Aviva
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- Figure 16: Key financial data for Aviva UK & Ireland General Insurance business, Interim results for first nine months, 2012 and 2013
- Figure 17: Key financial data for Aviva UK & Ireland General Insurance business, 2011 and 2012
- Ageas
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- Figure 18: Key financial data for Ageas UK, Non-life insurance business, H1 2012 AND H1 2013
- Figure 19: Key financial data for Ageas Insurance limited, UK business, 2011 and 2012
- AXA
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- Figure 20: Key financial data for AXA Insurance plc, 2011 and 2012
- Bupa
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- Figure 21: Bupa – UK market unit results, H1 2012 and H1 2013
- Direct Line Group
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- Figure 22: Key financial data for Direct Line Group, interim results for the first nine months 2012 and 2013
- Figure 23: Key financial data for Direct Line Group, 2011 and 2012
- LV=
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- Figure 24: Key financial data for LV= Group, General Insurance business, H1 2012 AND H1 2013
- Figure 25: Key financial data for LV=, 2011 and 2012
- RSA Insurance
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- Figure 26: Key financial data for RSA UK Insurance, H1 2012 AND H1 2013
- Figure 27: Key financial data for RSA UK Insurance, 2011 and 2012
Brand Research
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- Brand map
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- Figure 28: Attitudes towards and usage of brands in the insurance sector, October 2013
- Correspondence analysis
- Brand attitudes
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- Figure 29: Attitudes, by insurance brand, October 2013
- Brand personality
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- Figure 30: Insurance brand personality – macro image, October 2013
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- Figure 31: Insurance brand personality – micro image, October 2013
- Brand experience
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- Figure 32: Insurance brand usage, October 2013
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- Figure 33: Satisfaction with various insurance brands, October 2013
- Figure 34: Consideration of insurance brands, October 2013
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- Figure 35: Consumer perceptions of current insurance brand performance, October 2013
- Brand index
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- Figure 36: Insurance brand index, October 2013
- Target group analysis
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- Figure 37: Target groups, October 2013
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- Figure 38: Insurance brand usage, by target groups, October 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
- Adspend on general insurance products continues its downward trend
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- Figure 39: Topline adspend for general insurance products, 2010/11-2012/13
- Car insurance and home insurance continue to dominate the market
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- Figure 40: Adspend, by general insurance category, 2010/11-2012/13
- TV advertising remains the most popular channel for insurance adspend
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- Figure 41: General insurance adspend, by media type, 2010/11-2012/13
- Majority of top 10 insurers reduced adspend over the last 12 months
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- Figure 42: Top 20 general insurance advertisers, 2010/11-2012/13
- A note on adspend
General Insurance Product Ownership
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- Key points
- Only one in 10 do not have some type of general insurance cover
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- Figure 43: General insurance product ownership, September 2013
- Car and home insurance tops the product ownership list
- Regulatory scrutiny could limit sales of many forms of discretionary insurance
- 50% have four or more different types of general insurance cover
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- Figure 44: Number of different general insurance products held, September 2013
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- Figure 45: Number of insurance products held, by type of product owned, September 2013
Renewal Behaviour by Product
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- Key points
- Policy switching is highest in the car insurance sector
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- Figure 46: Behaviour at last policy renewal, September 2013
- Shoparound behaviour will extend across most insurance markets
- An increased focus on customer retention
- Insurance product tenure
- Insurers only have a couple of years to gain customer loyalty
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- Figure 47: Length of time product held with existing insurer, by policy owned, September 2013
- Changing perceptions of insurance as a commodity
Expected Behaviour at Next Renewal by Product
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- Key points
- Intentions to shop around at next renewal remain high
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- Figure 48: Likelihood to shop around at next policy renewal, September 2013
- Detailed underwriting and employer benefits reduce the incentive to shop around for health insurance
- New packaged current account rules could increase shoparound activity
- Customers who remain loyal for three or more years are much less likely to shop around
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- Figure 49: Likelihood to shop around at next car insurance policy renewal, by length of time product held with existing insurer, September 2013
- Figure 50: Likelihood to shop around at next home contents insurance policy renewal, by length of time product held with existing insurer, September 2013
Reasons for Shopping Around at Renewal
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- Key points
- Consumers expect to find a cheaper deal at each renewal
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- Figure 51: Reasons for shopping around at renewal, September 2013
- Renewal price checking increases with age
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- Figure 52: Respondents who shopped around to check the competitiveness of their renewal quotation or to check if their provider offers lower premiums to new customers, by age, September 2013
- Price checking as a bargaining tool
- One in four shop around for a better level of cover
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- Figure 53: Reasons for shopping around at renewal, by number of general insurance products owned, September 2013
Attitudes Towards Insurance Loyalty Schemes
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- Key points
- Policyholders link loyalty to lower premiums
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- Figure 54: Interest in incentives to encourage loyalty to an insurance provider, September 2013
- Customer service assurances hold limited appeal among policyholders
- Multi-product discounts appeal to one in four policyholders
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- Figure 55: Interest in incentives to encourage loyalty to an insurance provider, by number of general insurance products owned, September 2013
- Customer reward schemes may struggle to stand out in a plethora of special offers
- Giving people a reason to remain loyal
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- Figure 56: Interest in incentives to encourage loyalty to an insurance provider, by reasons for shopping around at renewal, September 2013
Attitudes Towards General Insurance
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- Key points
- 30% admit that arranging insurance is a hassle
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- Figure 57: Attitudes towards general insurance, September 2013
- Appealing to a sense of achievement
- Over-55s are more likely to be reassured by insurance…
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- Figure 58: Agreement with selected attitudinal statements regarding general insurance, by age, September 2013
- …but are also more likely to be overwhelmed by choice of products on offer
- Consumers are unenthusiastic about multi-product deals unless they deliver a financial saving
- Multi-product holders are prepared to invest time in finding the best deal
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- Figure 59: Attitudes towards general insurance, by number of general insurance products owned, September 2013
Trust in General Insurance Providers
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- Key points
- Consumers are divided over perceptions of trust in insurance companies
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- Figure 60: Consumer trust in general insurance providers, September 2013
- Consumers are most likely to distrust the approach to pricing
- Over-65s are much more likely to trust insurance companies
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- Figure 61: Agreement with statements about trust in general insurance providers, by age, September 2013
- Lack of trust can be partly linked to confusion and uncertainty
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- Figure 62: Attitudes towards general insurance, by consumer trust in general insurance providers, September 2013
Appendix – Brand Research
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- Figure 63: Brand usage, October 2013
- Figure 64: Brand commitment, October 2013
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- Figure 65: Brand usage, October 2013
- Figure 66: Brand diversity, October 2013
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- Figure 67: Brand satisfaction, October 2013
- Figure 68: Brand attitude, October 2013
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- Figure 69: Brand image – macro image, October 2013
- Figure 70: Brand image – micro image, October 2013
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- Figure 71: Profile of target groups, by demographics, October 2013
- Figure 72: Psychographic segmentation, by target groups, October 2013
- Figure 73: Brand usage, by target groups, October 2013
- Brand index
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- Figure 74: Brand index, October 2013
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Appendix – General Insurance Product Ownership
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- Figure 75: Most popular general insurance product ownership, by demographics, September 2013
- Figure 76: Next most popular general insurance product ownership, by demographics, September 2013
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- Figure 77: Other general insurance product ownership, by demographics, September 2013
- Figure 78: Number of general insurance products owned, by demographics, September 2013
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Appendix – Renewal Behaviour by Product
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- Figure 79: Behaviour at last policy renewal – Car insurance, by demographics, September 2013
- Figure 80: Behaviour at last policy renewal – Annual travel insurance, by demographics, September 2013
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- Figure 81: Behaviour at last policy renewal – Pet insurance, by demographics, September 2013
- Figure 82: Behaviour at last policy renewal – Medical/health insurance, by demographics, September 2013
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- Figure 83: Behaviour at last policy renewal – Home emergency cover, by demographics, September 2013
- Figure 84: Behaviour at last policy renewal – Mobile phone insurance, by demographics, September 2013
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Appendix – Expected Behaviour at Next Renewal by Product
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- Figure 85: Likelihood to shop around at next policy renewal – Car insurance, by demographics, September 2013
- Figure 86: Likelihood to shop around at next policy renewal – Home contents insurance, by demographics, September 2013
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- Figure 87: Likelihood to shop around at next policy renewal – Buildings insurance, by demographics, September 2013
- Figure 88: Likelihood to shop around at next policy renewal – Home emergency cover, by demographics, September 2013
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- Figure 89: Likelihood to shop around at next policy renewal – Annual travel insurance, by demographics, September 2013
- Figure 90: Likelihood to shop around at next policy renewal – Medical/health insurance, by demographics, September 2013
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- Figure 91: Likelihood to shop around at next policy renewal – Pet insurance, by demographics, September 2013
- Figure 92: Likelihood to shop around at next policy renewal – Mobile phone insurance, by demographics, September 2013
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- Figure 93: Likelihood to shop around at next buildings insurance policy renewal, by length of time product held with existing insurer, September 2013
- Figure 94: Likelihood to shop around at next home emergency cover policy renewal, by length of time product held with existing insurer, September 2013
- Figure 95: Likelihood to shop around at next annual travel insurance policy renewal, by length of time product held with existing insurer, September 2013
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- Figure 96: Likelihood to shop around at next medical/health insurance policy renewal, by length of time product held with existing insurer, September 2013
- Figure 97: Likelihood to shop around at next pet insurance policy renewal, by length of time product held with existing insurer, September 2013
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- Figure 98: Likelihood to shop around at next mobile phone insurance policy renewal, by length of time product held with existing insurer, September 2013
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Appendix – Reasons for Shopping Around at Renewal
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- Figure 99: Most popular reasons for shopping around at renewal, by demographics, September 2013
- Figure 100: Next most popular reasons for shopping around at renewal, by demographics, September 2013
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Appendix – Attitudes Towards Insurance Loyalty Schemes
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- Figure 101: Interest in incentives to encourage loyalty to an insurance provider, by demographics, September 2013
- Figure 102: Interest in incentives to encourage loyalty to an insurance provider, by demographics, September 2013 (continued)
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Appendix – Attitudes Towards General Insurance
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- Figure 103: Attitudes towards general insurance, by demographics, September 2013
- Figure 104: Attitudes towards general insurance, by demographics, September 2013 (continued)
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Appendix – Trust in General Insurance Providers
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- Figure 105: Agreement with the statement ‘I trust insurance companies to give me a fair deal’, by demographics, September 2013
- Figure 106: Agreement with the statement ‘I trust insurance companies to handle any claims that I make fairly’, by demographics, September 2013
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- Figure 107: Agreement with the statement ‘I trust insurance companies to give me a product that is suitable for my needs’, by demographics, September 2013
- Figure 108: Consumer trust in general insurance providers, by number of general insurance products owned, September 2013
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