Table of Contents
Executive Summary
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- The market
- Motor insurance GWP declined in 2013
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- Figure 1: Forecast of motor insurance GWP (personal lines), 2008-18
- Market factors
- Premiums decline due to increased competition as a result of the ban on referral fees
- Net claims decrease in 2012
- Bodily injury claims expected to increase in 2013, despite referral fee ban
- The Competition Commission investigation is due by September 2014
- ‘My Licence’ initiative to reduce fraud and simplify the application process
- Companies, brands and innovation
- Direct Line Group remains the largest underwriter in the motor insurance market
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- Figure 2: Top five personal motor underwriters, by gross written premiums, 2012 (UK insurers only)
- Post Office stands out from the crowd on trust
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- Figure 3: Attitudes towards and usage of brands in the motor insurance sector, November 2013
- Advertising spend declines for second successive year in 2012/13
- The consumer
- Motor insurance ownership
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- Figure 4: Motor insurance ownership, December 2013
- Online is the dominant channel in purchasing car insurance
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- Figure 5: Car insurance purchasing methods, December 2013
- Renewal behaviour
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- Figure 6: Renewal behaviour, December 2013
- Interest in add-ons
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- Figure 7: Interest in additional cover, December 2013
- Driving behaviour
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- Figure 8: Factors that affect car insurance premiums, December 2013
- Attitudes towards motor insurance
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- Figure 9: Attitudes towards car insurance, December 2013
- What we think
Issues and Insights
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- Motorists’ lack of confidence in their driving ability is holding back telematics
- The facts
- The implications
- Confusing policy documents can damage brand reputation
- The facts
- The implications
- Greater transparency can lead to a more trusted relationship between motorists and insurers
- The facts
- The implications
- Smartphone and tablet channels can help to boost retention rates
- The facts
- The implications
Trend Application
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- Developing telematics
- Tailored car insurance
- Using smartphones and tablets to improve loyalty
Market Drivers
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- Key points
- Increased competition causes average premiums to decline
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- Figure 10: AA BIPI motor third party and comprehensive shoparound premium trends, January 2010-January 2014
- Net claims continue to decrease improving profitability
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- Figure 11: NWP and net claims for UK personal motor insurance, 2002-12
- The cost of bodily injury claims continues to rise despite safer roads and cars
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- Figure 12: Average UK motor claims payout, by type, 2008-12
- Number of claims is expected to remain stable in 2013
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- Figure 13: Total number of private UK car insurance claims notified and claims frequency, 2003-13
- Number of vehicles on the road remains level
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- Figure 14: UK car parc, 2003-12
- Number of learner drivers remains low
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- Figure 15: Full GB driving licence holders, 1975/76-2012
- The number of new car registrations is creeping upwards
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- Figure 16: UK new car registrations, 2002-13
- The Competition Commission investigation is due by September 2014
- The gender directive has not affected premiums as much as expected
- ‘My Licence’ initiative to reduce fraud and simplify the application process
- The EU’s eCall initiative will start in October 2015
SWOT Analysis
Who’s Innovating?
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- Key points
- MORE TH>N offers a discount of up to 20% for using telematics app
- RAC uses telematics to diagnose vehicle faults
- More technology to reduce the risk of accidents
Market Size and Forecast
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- Key points
- Gross written premiums expected to have decreased further in 2013
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- Figure 17: Personal lines of motor insurance, GWP, 2005-13
- Underwriting losses continue to shrink
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- Figure 18: Breakdown of personal motor insurance market, by GWP, NWP, total outgoings and underwriting result, 2005-12
- Market forecast
- GWP expected to increase by 15% over the next five years
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- Figure 19: Forecast of motor insurance GWP (personal lines), 2008-18
- Figure 20: Forecast of motor insurance GWP (personal lines), 2008-18
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Direct Line Group remains the largest player in the motor insurance market
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- Figure 21: Top 10 personal motor underwriters, by gross written premiums, 2011 and 2012 (UK insurers only)
Companies and Products
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- Admiral
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- Figure 23: Key financial data for Admiral Group plc UK Car Insurance, 2011-13
- Ageas UK
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- Figure 24: Key financial data for Ageas UK, 2012-13
- Aviva
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- Figure 24: Key financial data for Aviva – General Insurance and health – United Kingdom and Ireland, 2012-13
- AXA
- Direct Line Group
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- Figure 24: Direct Line Group motor insurance financials, 2012 and 2013
- LV=
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- Figure 26: Key financial data for LV= General Insurance, 2012-13
- RSA
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- Figure 26: RSA financials, 2012 and 2013
Brand Research
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- Brand map
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- Figure 27: Attitudes towards and usage of brands in the motor insurance sector, November 2013
- Correspondence analysis
- Brand attitudes
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- Figure 28: Attitudes, by motor insurance brand, November 2013
- Brand personality
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- Figure 29: Motor insurance brand personality – macro image, November 2013
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- Figure 30: Motor insurance brand personality – micro image, November 2013
- Brand experience
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- Figure 31: Motor insurance brand usage, November 2013
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- Figure 32: Satisfaction with various motor insurance brands, November 2013
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- Figure 33: Consideration of motor insurance brands, November 2013
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- Figure 34: Consumer perceptions of current motor insurance brand performance, November 2013
- Brand recommendation
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- Figure 35: Recommendation of selected motor insurance brands, November 2013
- Brand index
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- Figure 36: Motor insurance brand index, November 2013
- Target group analysis
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- Figure 37: Target groups, November 2013
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- Figure 38: Motor insurance brand usage, by target groups, November 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
- Motor insurance advertising dips in 2012/13
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- Figure 39: Annual advertising expenditure on car insurance products, 2008/09-2012/13*
- Moneysupermarket.com is the fourth-largest advertiser in 2013/13
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- Figure 40: Top 20 Advertisers of car insurance, 2008/09-2012/13*
- TV and direct mail continue to dominate motor insurance adspend
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- Figure 41: Distribution of total adspend on car insurance products, by media type, 2008/09-2012/13*
- Note on adspend data
Channels to Market
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- Key points
- Online remains the most popular way to purchase car insurance
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- Figure 42: Car insurance purchasing methods, December 2012 and December 2013
- Phone services are more important for older consumers
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- Figure 43: Car insurance purchasing methods, by age, December 201
Motor Insurance Ownership
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- Key points
- Consumers are most likely to own a fully comprehensive policy
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- Figure 44: Motor insurance ownership, December 2013 and December 2012
- Only 6% of consumers own third party insurance
- The number of consumers using telematics remains low
- Older consumers are more likely to have a fully comprehensive policy
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- Figure 45: Motor insurance ownership, by age, December 2013
Renewal Behaviour
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- Key points
- Three quarters of consumers shopped around at their last renewal
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- Figure 46: Car insurance renewal behaviour, December 2013
- 35-54-year-olds most likely to switch, as they become lower-risk drivers
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- Figure 47: Renewal behaviour, by age, December 2013
- Drivers that switched are more likely to have used a price comparison website
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- Figure 48: Car insurance purchasing methods, by renewal behaviour, December 2013
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- Figure 49: Renewal behaviour, by current financial situation compared to a year ago, December 2013
Interest in Add-ons
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- Key points
- Motorists are divided in what they want from a car insurance policy
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- Figure 50: Interest in additional cover, December 2013
- Less wealthy drivers are more likely to want a basic, low-cost policy
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- Figure 51: Interest in additional cover, by demographics, December 2013
- Higher-income households are more likely to want a tailored policy
- Financial situation is no indicator of whether motorist wants additional cover as standard
- Price comparison sites are popular, even amongst consumers who are less price-sensitive
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- Figure 52: Car insurance purchasing methods, by interest in additional cover, December 2013
Driving Behaviour
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- Key points
- The potential for telematics remains high
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- Figure 53: Factors that affect car insurance premiums, December 2013
- Consumers are negative about their driving ability
- Younger drivers show surprisingly little appetite for telematics
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- Figure 54: Factors that affect car insurance premiums, by age, December 2013
- Retirees could use telematics to reflect their changing driving habits
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- Figure 55: Factors that affect car insurance premiums, by age, December 2013
Attitudes towards Motor Insurance
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- Key points
- High satisfaction levels are not driving customer loyalty
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- Figure 56: Attitudes towards car insurance, December 2013
- Motorists feel they understand their level of cover, yet find policies confusing and unclear
- Motorists are interested in finding out how their premium is calculated
- There is appetite amongst drivers to communicate remotely
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- Figure 57: Attitudes towards car insurance, by age, December 2013
- Finding policy documents unclear and confusing does not drive loyalty
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- Figure 58: Renewal behaviour, by agreement with the statement ‘I find insurance policy documents unclear and confusing’, December 2013
- Insurers need to beware of offering ambiguous add-ons
Appendix – Market Size and Forecast
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- Figure 59: Motor insurance market forecast, best and worst-case scenario, 2013-18
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Appendix – Brand Research
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- Figure 60: Brand usage, November 2013
- Figure 61: Brand commitment, November 2013
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- Figure 62: Brand momentum, November 2013
- Figure 63: Brand momentum, November 2013
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- Figure 64: Brand satisfaction, November 2013
- Figure 65: Brand recommendation, November 2013
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- Figure 66: Brand attitude, November 2013
- Figure 67: Brand image – macro image, November 2013
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- Figure 68: Brand image – micro image, November 2013
- Figure 69: Profile of target groups, by demographics, November 2013
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- Figure 70: Psychographic segmentation, by target groups, November 2013
- Figure 71: Brand usage, by target groups, November 2013
- Brand index
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- Figure 72: Brand index, November 2013
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Appendix – Channels to Market
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- Figure 73: Most popular car insurance purchasing methods, by demographics, December 2013
- Figure 74: Next most popular car insurance purchasing methods, by demographics, December 2013
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Appendix – Motor Insurance Ownership
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- Figure 75: Motor insurance ownership, by demographics, December 2013
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Appendix – Renewal Behaviour
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- Figure 76: Renewal behaviour, by demographics, December 2013
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Appendix – Interest in Add-ons
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- Figure 77: Interest in additional cover, by demographics, December 2013
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Appendix – Driving Behaviour
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- Figure 78: Most popular factors that affect car insurance premiums, by demographics, December 2013
- Figure 79: Next most popular factors that affect car insurance premiums, by demographics, December 2013
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Appendix – Attitudes towards Motor Insurance
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- Figure 80: Agreement with the statement ‘I’m satisfied with my current car insurance provider’, by demographics, December 2013
- Figure 81: Agreement with the statement ‘I have a good understanding of what my car insurance policy covers me for’, by demographics, December 2013
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- Figure 82: Agreement with the statement ‘I would like to know more about how my premium is calculated’, by demographics, December 2013
- Figure 83: Agreement with the statement ‘Having a comprehensive level of cover is more important to me than price’, by demographics, December 2013
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- Figure 84: Agreement with the statement ‘I would be happy to communicate with my car insurance provider via online live chat’, by demographics, December 2013
- Figure 85: Agreement with the statement ‘I find insurance policy documents unclear and confusing’, by demographics, December 2013
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- Figure 86: Agreement with the statement ‘I would consider managing my car insurance policy via a smartphone/tablet’, by demographics, December 2013
- Figure 87: Agreement with the statement ‘I would consider purchasing a car insurance policy via a smartphone/tablet’, by demographics, December 2013
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- Figure 88: Agreement with the statement ‘I think that buying additional cover is a waste of money’, by demographics, December 2013
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