Table of Contents
Executive Summary
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- The market
- Personal lines business stalls under competitive conditions
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- Figure 1: Personal lines gross written premiums, 2010-14
- Physical wealth ramps up as people amass household contents
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- Figure 2: Breakdown of household gross physical wealth: Great Britain, 2006/08-2010/12
- The consumer
- Home and car cover are the foundation for HNW business
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- Figure 3: Product ownership, August 2015
- Wealthier people still see value in comparing on price
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- Figure 4: Research activities in the last 12 months, August 2015
- Renewal outweighed switching in the last 12 months
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- Figure 5: People’s insurance experiences and management behaviour in the last 12 months, August 2015
- Price is still a key differentiator for wealthier clients
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- Figure 6: Reasons given for switching insurer in the last 12 months, August 2015
- UK-based customer service helps steer choice of insurer
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- Figure 7: Proportion ranking “UK-based customer service staff” as one of three most influential factors on choice of home insurers, by age and rank, August 2015
- Loyalty is being weakened by price motivations …
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- Figure 8: Attitudes towards arranging insurance, August 2015
- …but transparency could help to increase loyalty
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- Figure 9: Attitudes towards cover and value, August 2015
- What we think
Issues and Insights
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- Dedicated, UK-based client services can add value across all wealth levels
- The facts
- The implications
- Migration and foreign asset ownership demand a global insurance proposition
- The facts
- The implications
The Market – What You Need to Know
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- Intense competition suppresses total market premiums
- Household wealth and second homeownership are increasing
- The distribution of wealth and the population of wealthy people is changing
Insurance Market Overview
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- General insurance
- Personal lines business stalls under competitive conditions
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- Figure 10: Personal lines gross written premiums, 2010-14
- Direct-dominated motor market presents opportunities for high value car insurance
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- Figure 11: Personal motor insurance business (GWP), by distribution channel, 2014
- Private or premium banking product partnerships could deliver growth
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- Figure 12: Personal property insurance business (GWP), by distribution channel, 2014
- Life insurance
- Life insurance has stabilised following a period of decline
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- Figure 13: Life insurance (GWP), 2010-14
- Life insurance distribution is dominated by advice
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- Figure 14: Total regular protection premiums, by distribution channel, 2014
Trends in Household Wealth and Home Ownership
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- Physical wealth ramps up as people amass household contents
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- Figure 15: Breakdown of household gross physical wealth: Great Britain, 2006/08-2010/12
- The distribution of physical wealth is skewing towards the highest bands
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- Figure 16: Distribution of household goods in main residence, by banded values: Great Britain, 2006/08 - 2010/12
- 1 in 10 people has collectibles or valuables
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- Figure 17: Percentage of households with collectibles or valuables (including antiques, artwork and stamps): Great Britain, 2006/08-2010/12
- Identifying second homes is key to growing income from existing clients
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- Figure 18: Proportion of second homes abroad, by location, 2013-14
- Migrants are likely to be protective about properties they leave behind
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- Figure 19: Reasons for having a second home, of households who own a second home in England, 2013-14
Population of Mass Affluent/High Net Worth Consumers
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- The UK is the top destination for super-rich migrants…
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- Figure 20: Countries ranked by inflows of HNWIs*, 2000-14
- …and the popularity of the UK is likely to drive further inflows
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- Figure 21: Overseas-born population in the United Kingdom, excluding some residents in communal establishments, by top ten countries of birth, January 2014-December 2014
Companies and Brands – What You Need to Know
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- Product development is key in the battle to stand out
Competitive Strategies
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- Competing on client experience
- Oak Underwriting
- Dual International
- To split or not to split?
- Chubb
- Zurich
- Pioneering cyber and data protection for individuals
- PURE Insurance (US)
The Consumer – What You Need to Know
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- High home and motor insurance ownership can be converted into cross-sales
- Wealthier people are still sensitive to price as an indicator for value
- Communicating product quality has never been more important
Product Ownership and Channel Preference
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- Home and car cover are the foundation for HNW business
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- Figure 22: Product ownership, August 2015
- The direct channel remains important for many
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- Figure 23: Product ownership, by channel, August 2015
- Figure 24: Home contents insurance ownership, by channel and value of investable assets, August 2015
- Wealthier people are open to multiple insurance products
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- Figure 25: Number of different insurance products owned, August 2015
Research Methods for Insurance Products
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- Wealthier people still see value in comparing on price…
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- Figure 26: Research activities in the last 12 months, August 2015
- …but price comparison site use tails off as income rises
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- Figure 27: Research activities in the last 12 months, by household income, August 2015
Recent Insurance-Related Activities
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- Renewal outweighed switching in the last 12 months
- Wealthier people are making mid-term adjustments
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- Figure 28: People’s insurance experiences and management behaviour in the last 12 months, August 2015
- Loyalty increases as people age
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- Figure 29: People’s behaviour and experiences with insurance in the last 12 months, by age, August 2015
Reasons for Switching Insurer
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- Price is still a key differentiator for wealthier clients …
- …and specialists are being challenged to accept clients from the middleground
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- Figure 30: Reasons given for switching insurer in the last 12 months, August 2015
Factors Influencing Choice of Insurer
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- Price is still the most important consideration….
- …although UK-based customer service helps steer choice of insurer
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- Figure 31: Factors influencing choice of home insurer, August 2015
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- Figure 32: Proportion ranking “UK-based customer service staff” as one of three most influential factors on choice of home insurers, by age and rank, August 2015
- The mass affluent put emphasis on lowest price
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- Figure 33: Proportion choosing ‘Rank 1’ for selected factors affecting choice of home insurer, by value of investable assets, August 2015
Attitudes towards Arranging Insurance
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- Loyalty is being weakened by price motivations
- Previous brand experience is important to nearly one in two
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- Figure 34: Attitudes towards arranging insurance, August 2015
Attitudes towards Cover and Value
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- Transparency could help to increase loyalty
- Technology will help to lessen insurable risks
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- Figure 35: Attitudes towards cover and value, August 2015
- Cover may be falling short of expectations
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- Figure 36: Agreement with the statement ‘I am confident that every insurance policy I have covers what I intended to insure in full’, by gross annual household income, August 2015
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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