Table of Contents
Executive Summary
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- Market set for return to growth
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- Figure 1: Gross written personal motor insurance premiums (UK business only), fan chart 2009-19
- Direct Line Group is the UK’s largest motor insurance underwriter
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- Figure 2: Share of UK motor insurance market, by gross written premiums, 2011-13 (UK business only)
- The consumer
- Most people have fully comprehensive car insurance
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- Figure 3: Motor insurance ownership, December 2014
- The internet is the key policy sales channel
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- Figure 4: Method used to arrange current car insurance policy, December 2014
- Three quarters shopped around for their last quote, but only 31% switched
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- Figure 5: Car insurance renewal behaviour, December 2014
- Add-ons raise some interest but willingness to pay is generally low
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- Figure 6: Interest in and ownership of car insurance add-on benefits, December 2014
- Price is the most important factor in choosing cover
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- Figure 7: Attitudes towards car insurance, December 2014
Issues and Insights
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- The eCall initiative will boost telematics by normalising in-car technology
- The facts
- The implications
- A niche built on flexibility?
- The facts
- The implications
- Comparison is key, but recognised brands have the advantage
- The facts
- The implications
The Market – What You Need to Know
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- 4% fall in premiums in 2014, but expected to return to growth
- Premium rises to push the industry to profit
- Breakthroughs in the fight against fraud
- Insurers continue to develop telematics
- 64% of policies are sold online
Market Size and Forecast
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- Gross written premiums shrank by 4% in 2014
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- Figure 8: Gross written personal motor insurance premiums (UK business only), 2010-14
- Market forecast
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- Figure 9: Gross written personal motor insurance premiums (UK business only), fan chart 2009-19
Market Drivers
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- New registrations continue to grow
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- Figure 10: Number of cars registered for the first time in the UK, 2005-14
- Premiums remained low in 2014…
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- Figure 11: AA BIPI motor comprehensive and third party whole market and shoparound premium trends, March 2010-December 2014
- …but falling costs led to a drop in underwriting losses
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- Figure 12: Personal motor insurance underwriting result, 2009-13
- Detected fraud has soared in recent years
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- Figure 13: Value of detected fraudulent personal motor claims, 2004-13
Telematics
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- Technology use remains rare…
- …but insurers continue to see the potential of telematics
- Wider use of telematics
Channels to Market
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- Online channels are the key space for policy sales…
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- Figure 14: Method used to arrange current car insurance policy, December 2014
- …but older drivers still have a tendency to buy over the phone
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- Figure 15: Method used to arrange current car insurance policy, by age, December 2014
- The role of price comparison websites
The Key Players – What You Need to Know
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- Direct Line is the UK’s biggest motor insurer
- Competitive strategies
- Adspend fell in 2014
- Price comparison sites are transforming promotional strategies
Market Share
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- Direct Line Group is the UK’s biggest motor insurer
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- Figure 16: Top 10 personal motor insurance underwriters, by gross written premiums, 2011-13 (UK business only)
Competitive Strategies
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- Growth or retention?
- Ageas
- esure
- Admiral
- An opportunity for innovation
- Direct Line Group
- Aviva
- Withdrawals and a focus on profitable niches
- RSA
- LV=
Brand Communication and Promotion
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- 18% fall in car insurance adspend
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- Figure 17: Total car insurance adspend, 2010-14*
- Aviva bucks the trend to increase spending on promotion
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- Figure 18: Top 20 UK car insurance advertisers, 2012-14*
- Television is the dominant advertising medium
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- Figure 19: Car insurance market adspend, by media type, 2014*
Brand Research
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- What you need to know
- Brand map
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- Figure 20: Attitudes towards and usage of selected brands, December 2014
- Key brand metrics
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- Figure 21: Key metrics for selected brands, December 2014
- Brand attitudes: Sainsbury’s Bank stands out for perception of rewarding loyalty
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- Figure 22: Attitudes, by brand, December 2014
- Brand personality: Advertising influences vibrancy, exposure in non-finance markets influences accessibility and ethicality
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- Figure 23: Brand personality – Macro image, December 2014
- Wide spread of personality traits, but lack of strong negative associations
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- Figure 24: Brand personality – Micro image, December 2014
- Brand analysis
- LV= combines strong overall brand image with vibrancy and a positive experience
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- Figure 25: User profile of LV=, December 2014
- AA Insurance has a strong benefit from AA’s reputation
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- Figure 26: User profile of AA Insurance, December 2014
- Sainsbury’s Bank uses Nectar card to encourage perception of rewarding loyalty
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- Figure 27: User profile of Sainsbury’s Bank, December 2014
- Aviva defined by quality and competency
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- Figure 28: User profile of Aviva, December 2014
- RAC Insurance appears to be catching up with AA Insurance
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- Figure 29: User profile of RAC Insurance, December 2014
- Post Office Insurance’s links with customer-facing service promote customer service
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- Figure 30: User profile of Post Office Insurance, December 2014
- AXA’s more serious offering results in authoritative image
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- Figure 31: User profile of AXA, December 2014
- Admiral is another brand with all-round attributes
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- Figure 32: User profile of Admiral, December 2014
- esure lacks the same personality as other brands
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- Figure 33: User profile of esure, December 2014
- MORE TH>N’s fresher brand image creates progressive image
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- Figure 34: User profile of MORE TH>N, December 2014
- Churchill uses advertising to create a particularly fun brand image
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- Figure 35: User profile of Churchill, December 2014
- Direct Line has a strong, recognisable brand which continues to encourage usage
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- Figure 36: User profile of Direct Line, December 2014
- Saga Insurance’s over-50s specialism creates a unique proposition
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- Figure 37: User profile of Saga Insurance, December 2014
The Consumer – What You Need To Know
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- The most common insurance product in the UK
- Telematics still haven’t hit the mainstream
- Shopping around is standard practice
- A price-driven market
- Questions over fairness and value
Motor Insurance Ownership
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- 69% of people have car insurance
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- Figure 38: Motor insurance ownership, December 2014
- Drivers continue to shun telematics
- One in 10 under-25s choose third party cover
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- Figure 39: Motor insurance ownership, by age, December 2014
Motor Insurance Renewal Behaviour
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- Most stayed with their existing insurer at their last renewal
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- Figure 40: Car insurance renewal behaviour, December 2014
- Fully comprehensive policyholders are more likely to switch…
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- Figure 41: Car insurance renewal behaviour, by type of car insurance policy held, December 2014
- …and price comparison sites are the most effective channels for switching
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- Figure 42: Car insurance renewal behaviour, by method used to arrange current car insurance policy, December 2014
Interest in Add-ons
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- There is a strong demand for add-on benefits…
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- Figure 43: Interest in and ownership of car insurance add-on benefits, December 2014
- …but most are wanted as free perks, not as additional purchases
- A third would prefer to build their own policy
- Young drivers are most open to paying for add-ons
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- Figure 44: Interest in paying for car insurance add-ons, by age, December 2014
Attitudes Towards Motor Insurance
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- Price is the most important feature of insurance policies
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- Figure 45: Attitudes towards car insurance, December 2014
- The benefits of insurance are universally recognised
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- Figure 46: Agreement with the statement “I would not choose to purchase car insurance if it was not a legal requirement”, by current financial situation, December 2014
- Reputational problems threaten the market…
- …despite positive claims experiences outweighing negative ones
Appendix – Market Size and Forecast
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- Figure 47: Best- and worst-case forecast of gross written personal motor insurance premiums (UK business only), 2014-19
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Appendix – Claims Statistics
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- Average claim value
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- Figure 48: Average car insurance claim cost, by type of claim, 2013 and 2014
- Claims volume
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- Figure 49: Volume of car insurance claims settled, by type of claim, 2013 and 2014
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