Table of Contents
Executive Summary
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- The market
- Home insurance market set for a return to growth over the coming years
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- Figure 1: Gross written domestic property insurance premiums – fan chart, 2009-19
- Market factors
- Home insurance premiums continue to fall
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- Figure 2: Average home insurance market and shoparound* premiums (quarterly basis) January 2009 – October 2014
- Falling claims maintain profit despite reduction in income…
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- Figure 3: Gross domestic home insurance claims, by value, 2009-13
- … but winter storms have impacted expenses
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- Figure 4: Distribution of domestic home insurance claims, by gross value, by type of peril, 2009-13
- Companies and products
- Direct Line Group is the biggest player in the home insurance market
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- Figure 5: domestic property insurance market share, by GWP, 2013
- Brand promotion
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- Figure 6: Total adspend in the home insurance market, 2010-14
- The consumer
- Two thirds of people have home insurance
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- Figure 7: Ownership of home insurance and other general insurance products, September 2014
- Most policyholders researched home insurance online
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- Figure 8: Sources used to get information to help choose last home insurance policy, September 2014
- Two thirds stayed with their existing insure at their last renewal
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- Figure 9: Actions taken at last home insurance renewal, September 2014
- Three quarters of home insurance claimants were satisfied with their last claim
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- Figure 10: Satisfaction with most recent home insurance claim, September 2014
- Most policyholders will give their existing insurer the first chance at renewal
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- Figure 11: Expected renewal plans for next home insurance policy, September 2014
- Trust is the most important factor for consumers
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- Figure 12: Important factors affecting choice of home insurance policy, September 2014
- What we think
Issues and Insights
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- Is lack of differentiation a problem for insurers?
- The facts
- The implications
- A good claims service is the best service
- The facts
- The implications
- Direct Line shows that brand still plays a major role in the Moneysupermarket era
- The facts
- The implications
Trend Application
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- No claims discounts give the chance to make a deal
- Consumer will choose value over price for the right policy
- Talk to the next generation through their parents
Market Drivers
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- Key points
- Premium prices continue to fall
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- Figure 13: Average home insurance market and shoparound* premiums (quarterly basis) January 2009 – October 2014
- Inflation drops but wage rises remain low
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- Figure 14: Annual percentage change in CPI and AWE (regular pay), monthly basis, January 2009 – October 2014
- Home insurance claims fall further
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- Figure 15: Total domestic home insurance claims, 2009-13
- Winter storms cause big rise in weather-related claims in 2014
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- Figure 16: Distribution of domestic home insurance claims, by gross value, by type of peril, 2009-13
- Flood Re to offer help for flood-threatened consumers
- Detected fraud dropped in 2013
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- Figure 17: Domestic home insurance claims fraud detected, 2009-13
- Innovation centres around increased cover for affluent consumers
SWOT Analysis
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- Figure 18: Home insurance market SWOT, December 2014
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Market Size and Forecast
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- Key points
- Falling premiums are stifling the market…
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- Figure 19: Gross and net written premiums – domestic home insurance, 2003-14
- … but policies remained profitable in 2013
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- Figure 20: Domestic property insurance underwriting ratio, 2003-13
- Market Forecast
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- Figure 21: Gross written domestic property insurance premiums – fan chart, 2009-19
- Figure 22: Forecast of gross written premiums – domestic property insurance, 2009-19
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Direct Line Group is the market leader in home insurance
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- Figure 23: Largest 15 parent groups active in the domestic property insurance market, by GWP, 2013
- Lloyds falls to third place
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- Figure 24: Top six domestic property insurance parent groups, by GWP, 2011-13
Companies and Products
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- Direct Line Group
- Company description
- Home insurance product range
- Recent financial performance
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- Figure 25: Key financial data for Direct Line Group (Home), 2012 and 2013
- Figure 26: Key financial data for Direct Line Group (Home), H1 2013 and H1 2014
- Recent activity
- Aviva
- Company description
- Home insurance product range
- Recent financial performance
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- Figure 27: Key financial data for Aviva (UK and Ireland, General Insurance), 2012 and 2013
- Figure 28: Key financial data for Aviva (UK and Ireland, General Insurance), H1 2013 and H1 2014
- Recent activity
- Lloyds Banking Group
- Company description
- Home insurance product range
- Recent financial performance
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- Figure 29: Key financial data for Lloyds Banking Group (General Insurance), 2012 and 2013
- Figure 30: Key financial data for Lloyds Banking Group (General Insurance), H1 2013 and H1 2014
- Recent activity
- RSA Group
- Company description
- Home insurance product range
- Recent financial performance
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- Figure 31: Key financial data for RSA (UK Personal, Household), 2012 and 2013
- Figure 32: Key financial data for RSA (UK Personal, Household), H1 2013 and H1 2014
- Recent activity
- AXA
- Company description
- Home insurance product range
- Recent financial performance
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- Figure 33: Key financial data for AXA (UK and Ireland, Property and Casualty), 2012 and 2013
- Figure 34: Key financial data for AXA (UK and Ireland, Property and Casualty), H1 2013 and H1 2014
- Recent activity
Brand Communication and Promotion
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- Key points
- Total adspend
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- Figure 35: Total adspend in the home insurance market, 2010-14
- Half of all adspend is spent on direct mail
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- Figure 36: Total adspend in the home insurance market, by media type, 2012-14
- Direct Line is the biggest advertiser in the home insurance market
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- Figure 37: Top 20 advertisers of home insurance, 2012-14
- A note on adspend
Channels to Market
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- Key points
- Most policyholders shop online for home insurance
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- Figure 38: Channels used to purchase last home contents policy, September 2014
- Intermediated sales fell again in 2013
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- Figure 39: Domestic property insurance, by GWP, by distribution channel, 2009-13
Home Insurance Ownership
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- Key points
- Two thirds have some home insurance
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- Figure 40: Ownership of home insurance and other general insurance products, September 2014
- Home insurance is not immune from personal budget cuts
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- Figure 41: Ownership of home insurance policies, by current financial situation, September 2014
- Over-45s are more likely to have insurance
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- Figure 42: Ownership of home insurance policies, by age, September 2014
- Policy ownership is lower in London
- Six in 10 renters have no home insurance
Home Insurance Research Sources
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- Key points
- Most people research home insurance online
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- Figure 43: Sources used to get information to help choose last home insurance policy, September 2014
- Just a third went direct to insurers
- Mortgage point-of-sale is under-exploited
- The importance of recommendation
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- Figure 44: Consumers who used recommendations from friends/family to help choose their most recent home insurance policy, by age, September 2014
Most Recent Renewal Behaviour
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- Key points
- Less than a third changed providers at their last renewal…
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- Figure 45: Actions taken at last home insurance renewal, September 2014
- … but is this loyalty?
- PCWs are the biggest prompts for switching
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- Figure 46: Percentage of home insurance policyholders who switched their insurer at their last renewal, by selected sources of policy information, September 2014
The Impact of Claims on Switching Behaviour
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- Key points
- Around half have claimed on home insurance
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- Figure 47: Time since last home insurance claim, September 2014
- More than three quarters of claimants were satisfied with their last claim
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- Figure 48: Satisfaction with most recent home insurance claim, September 2014
- Claims dissatisfaction is a strong push factor
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- Figure 49: Percentage of home insurance policyholders who switched their insurer at their last renewal, by satisfaction with most recent home insurance claim, September 2014
Next Renewal Plans
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- Key points
- Two thirds will give their existing insurer the first chance to renew
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- Figure 50: Expected renewal plans for next home insurance policy, September 2014
- Only one in 20 intend to switch…
- ... but there is potential for change
- One in 10 previous switchers expect to move again
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- Figure 51: Expected renewal plans for next home insurance policy, by action at last renewal, September 2014
Factors Affecting Choice of Home Insurance Policy
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- Key points
- Trustworthiness is the most important factor when choosing insurers
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- Figure 52: Importance of factors affecting choice of home insurance policy, September 2014
- Price is still a huge consideration…
- … especially for lower earners
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- Figure 53: Percentage of consumers who say that "Offering the cheapest quote" is either very important or somewhat important when choosing a home insurance policy, by gross annual household income, September 2014
- Importance of previous experience could be suppressing churn
- When it comes to insurance, familiarity doesn’t breed contempt
Appendix – Market Size and Forecast
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- Figure 54: Best- and worst-case forecast of gross written premiums – domestic property insurance, 2009-19
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