Table of Contents
Overview
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- What you need to know
- Scope of this Report
Executive Summary
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- The market
- Motor premiums reached new record high in 2016
- Premiums set to soar again in 2017
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- Figure 1: Forecast of the value of gross written personal motor insurance premiums (UK business only), 2011-21
- Companies and brands
- Direct Line was the largest underwriter again in 2015
- On-demand insurance
- Direct Line and Aviva remain at the forefront
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- Figure 2: Attitudes, by brand, December 2016
- The consumer
- Nine out of 10 policyholders have fully comp
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- Figure 3: Ownership of motor insurance, November 2016
- Only one in four policyholders chose not to shop around
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- Figure 4: Motor insurance renewal behaviour, December 2015 and November 2016
- Lack of trust in renewal quote drives price comparison usage
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- Figure 5: Attitudes towards motor insurance, November 2016
- Claimants still prefer to call
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- Figure 6: Motor insurance channel preferences, November 2016
- Over two fifths interested in car sharing schemes
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- Figure 7: Interest in car sharing or rental schemes, November 2016
- What we think
Issues and Insights
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- How can motor insurers reduce price sensitivity?
- The facts
- The implications
- Fewer young people getting in the driving seat
- The facts
- The implications
- Will insurance and banking blur in to one?
- The facts
- The implications
The Market – What You Need to Know
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- Premiums reached new record high in 2016
- More cars, but fewer young drivers
- Autonomous features start to impact insurers
- IPT to increase to 12% in 2017
- Discount rate slashed
- Whiplash reforms set to offer respite
Market Size and Forecast
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- Premiums reached new record high in 2016
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- Figure 8: Gross written personal motor insurance premiums (UK business only), 2012-16
- Market forecast
- Premiums set to soar again in 2017
- Brexit could inflate premiums
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- Figure 9: Forecast of the value of gross written personal motor insurance premiums (UK business only), 2011-21
- Figure 10: Forecast of the value of gross written personal motor insurance premiums (UK business only), 2011-21
- Forecast methodology
Market Environment
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- Number of licensed cars exceeds 30 million
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- Figure 11: Number of licensed vehicles (cars) in the UK, 1994-2015
- New car sales hit record high
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- Figure 12: Number of new car registrations in 2011-16 and forecast for 2017-18
- Government prepares for driverless cars
- Premiums continued to harden in 2016
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- Figure 13: Average premium for comprehensive car insurance policies, 2012-16
- Accidental damage fuels rise in claims costs
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- Figure 14: Volume and average cost of domestic motor insurance claims for private cars, 2013-16
- Insurers made underwriting loss again in 2015
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- Figure 15: Personal motor insurance underwriting result, 2011-15
Regulatory and Legislative Changes
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- IPT to increase to 12% in 2017
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- Figure 16: Changes to the insurance premium tax rate, 1 October 1994-1 June 2017
- Discount rate slashed
- Whiplash reforms set to offer respite
- FCA wants insurers to offer more transparency
- Brexit could add to insurer costs
Companies and Brands – What You Need to Know
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- Direct Line was the largest underwriter again in 2015
- Taking control of autonomous policies
- On-demand insurance
- Direct Line and Aviva remain prominent
- Non-specialists highlight potential for others to diversify
- Motor insurers put the brakes on ATL adspend
Underwriter Share
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- Direct Line was the largest underwriter again in 2015
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- Figure 17: Top 10 personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2013-15 (UK business only)
Competitive Strategies
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- Taking control of autonomous policies
- Telematics: insurers look to break out of a niche market
- Big Data now a big issue
- InsurTech reinvigorates industry
- On-demand insurance
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- Figure 18: Just Miles app screenshot, launched February 2017
- GoCompare and esure part ways
- Good customer service seen to boost renewals…
- …now for increased transparency
Advertising and Marketing Activity
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- Motor insurers put the brakes on ATL adspend
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- Figure 19: Total above-the-line, online display and direct mail advertising expenditure on car insurance, 2012-16
- TV still the driving force for ATL campaigns
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- Figure 20: Total above-the-line, online display and direct mail advertising expenditure on car insurance, by media type, 2016
- Direct Line looks to stay in the public eye
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- Figure 21: Above-the-line, online display and direct mail advertising expenditure on car insurance, by the top 20 advertisers, 2014-16
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 22: Attitudes towards and usage of selected brands, December 2016
- Key brand metrics
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- Figure 23: Key metrics for selected brands, December 2016
- Brand attitudes: Saga’s focus on over-50s makes it stand out
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- Figure 24: Attitudes, by brand, December 2016
- Brand personality: Humorous TV ads help Direct Line build a fun image
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- Figure 25: Brand personality – Macro image, December 2016
- People are most positive about established traditional insurers
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- Figure 26: Brand personality – Micro image, December 2016
- Brand analysis
- Direct Line and Aviva remain prominent
- LV=, AXA and Zurich also viewed positively, but lack standout
- Admiral, Churchill and MORE TH>N
- Non-specialists highlight potential for others to diversify
- Swinton seen as less accessible despite vast branch network
The Consumer – What You Need to Know
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- Nine out of 10 policyholders have fully comp
- Aviva and Direct Line prove it’s not all about price comparison
- Half of consumers go for the cheapest option
- Only one in four policyholders chose not to shop around
- Claimants still prefer to speak to someone
- Over two fifths interested in car sharing schemes
Ownership of Motor Insurance
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- Nine out of 10 policyholders have fully comp
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- Figure 27: Ownership of motor insurance, November 2016
- A third of 17-24s don’t have a driving licence
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- Figure 28: Proportion of consumers without a driving licence, by age, November 2016
Motor Insurance Providers
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- Aviva and Direct Line prove it’s not all about price comparison
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- Figure 29: Motor insurance providers, November 2016
- AA highlights the potential for cross-selling
Reasons for Choosing Provider
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- Half of consumers go for the cheapest option
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- Figure 30: Reasons for choosing current motor insurance provider/policy, November 2016
- Packages for new car owners
- Cuvva for the holidays
Motor Insurance Renewal Behaviour
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- Only one in four policyholders chose not to shop around
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- Figure 31: Motor insurance renewal behaviour, December 2015 and November 2016
- Renewal communications should be sent digitally
Motor Insurance Channel Preferences
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- Claimants still prefer to call
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- Figure 32: Motor insurance channel preferences, November 2016
- Management apps can make mobile go mainstream
Attitudes towards Motor Insurance
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- Lack of trust in renewals drives price comparison usage
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- Figure 33: Attitudes towards motor insurance, November 2016
- Customisation and transparency will appease consumers
Interest in Car Sharing Policies
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- Over two fifths interested in car sharing schemes
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- Figure 34: Interest in car sharing or rental schemes, November 2016
- Customer-centric insurance models
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- Figure 35: Preferred types of insurance cover for car sharing or rental schemes, November 2016
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Additional best/worst forecast table
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- Figure 36: Best- and worst-case forecast for the value of gross written premiums for personal motor insurance (UK business only), 2016-21
- Forecast methodology
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