Table of Contents
Overview
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- What you need to know
- Products covered in this Report
- Definitions
Executive Summary
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- The market
- Value of general insurance premiums rose by £600 million in 2016
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- Figure 1: General insurance revenue – retail products – UK risks, by gross written premiums, 2012-16
- Motor insurance premiums account for 40% of incomings…
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- Figure 2: Share of premium income, by category, UK general insurance retail products, by gross written premiums, 2016
- Companies and brands
- Motor insurance accounts for over a third of total adspend
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- Figure 3: Total above-the-line, online display and direct mail advertising expenditure on general insurance, 2012/13-2016/17*
- The consumer
- Motor and home policies sit at the core of general insurance
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- Figure 4: Insurance product ownership, September 2017
- Consumers show little loyalty towards general insurers
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- Figure 5: Switching activity in general insurance markets, September 2017
- The importance of multichannel communication is clear
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- Figure 6: Channel preferences in general insurance, September 2017
- Price guarantees most likely to improve retention
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- Figure 7: Things that would encourage consumers to renew policies with their existing insurers, September 2017
- Consumers want more ways to customise policies
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- Figure 8: Interest in new features, September 2017
- Insurers can utilise Open Banking to improve engagement
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- Figure 9: Interest in sharing financial data with different providers, September 2017
- What we think
Issues and Insights
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- Flexible policies can help to address the insurance gap
- The facts
- The implications
- The loyalty exchange
- The facts
- The implications
- PFMs could manage consumers’ insurance needs
- The facts
- The implications
The Market – What You Need to Know
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- Value of general insurance premiums rose by £600 million in 2016
- Motor insurance premiums account for 40% of incomings
- Improving transparency at renewal
- Open Banking gives insurers the opportunity to get personal
Market Size
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- Value of general insurance premiums rose by £600 million in 2016
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- Figure 10: General insurance revenue – retail products – UK risks, by gross written premiums, 2012-16
- Drop in claims helps insurers to boost underwriting profits
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- Figure 11: General insurance – retail products – UK outgo and underwriting result, 2012-16
Market Segmentation
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- Motor insurance premiums account for 40% of incomings…
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- Figure 12: Share of premium income, by category, UK general insurance retail products, by gross written premiums, 2016
- … but cost pressures and claim costs lead to motor underwriting losses
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- Figure 13: Underwriting result – UK general insurance retail products, 2012-16
- The calm after the storm
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- Figure 14: Claims ratio – UK general insurance retail products, 2012-16
Market Environment
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- Solvency II forces insurers to boost reserves
- GDPR underpins the need for transparency
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- Figure 15: Types of information that consumers would like insurers to share, May 2017
- Open Banking gives insurers the opportunity to get personal
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- Figure 16: Types of information that consumers would be comfortable sharing with insurers, May 2017
- FCA calls for greater access to insurance…
- …and investigates insurers’ pricing practices
- IPT increases again
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- Figure 17: Changes to the insurance premium tax rate, 1 October 1994-1 June 2017
Companies and Brands – What You Need to Know
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- Smart policies: the new-generation of add-ons
- Multiple policies under one umbrella
- Motor insurance accounts for over a third of total adspend
Competitive Strategies
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- Smart policies: the new-generation of add-ons
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- Figure 18: Ownership/interest in owning smart devices, May 2017
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- Figure 19: Willingness to share information from devices with insurers, May 2017
- Multiple policies under one umbrella
- Rewarding customer loyalty
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- Figure 20: Consumers’ perceptions of how well brands reward customer loyalty, August 2017
Advertising and Marketing Activity
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- Motor insurance accounts for over a third of total adspend
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- Figure 21: Total above-the-line, online display and direct mail advertising expenditure on general insurance, 2012/13-2016/17*
- Confused.com spent more on ATL ads than any insurer in 2016/17
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- Figure 22: Top 20 brands for above-the-line, online display and direct mail advertising expenditure on general insurance, 2014/15-2016/17*
- Sponsorships help to keep insurers in the public eye
- TV remains insurers’ favoured ATL channel
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- Figure 23: Total above-the-line, online display and direct mail advertising expenditure on general insurance, by media type, 2016/17*
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Motor and home policies sit at the core of general insurance
- Consumers show little loyalty towards general insurers
- The importance of multichannel communication is clear
- Price guarantees most likely to improve retention
- Consumers want more ways to customise policies
- Insurers can utilise Open Banking to improve engagement
Product Ownership
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- Motor and home policies sit at the core of general insurance
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- Figure 24: Insurance product ownership, September 2017
- Flexible policies can help to address the age and income gaps
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- Figure 25: Insurance product ownership (any insurance), September 2017
- Most consumers have multiple policies
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- Figure 26: Repertoire of insurance product ownership, September 2017
Switching Activity
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- Consumers show little loyalty towards general insurers
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- Figure 27: Switching activity in general insurance markets, September 2017
- The loyalty exchange
- Price promises could improve retention
Channel Preferences
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- Online channels are favoured for basic interactions…
- … however less than half would go with an online-only provider
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- Figure 28: Channel preferences in general insurance, September 2017
- Millennials demand more options
Improving Customer Retention
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- Price guarantees most likely to improve retention
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- Figure 29: Things that would encourage consumers to renew policies with their existing insurers, September 2017
- Reward schemes could make younger consumers less price sensitive
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- Figure 30: Things that would encourage consumers to renew policies with their existing insurers (ongoing rewards), September 2017
Interest in New Features
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- Consumers want more ways to customise policies
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- Figure 31: Interest in new features, September 2017
- PFMs could transform the way that Millennials access insurance
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- Figure 32: Interest in new features, by generation, September 2017
- Smart devices could give insurers a valuable new touchpoint
Interest in Sharing Financial Data
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- Insurers can utilise Open Banking to improve engagement
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- Figure 33: Interest in sharing financial data with different providers, September 2017
- Pro-active price comparison tools
Barriers to Data Sharing
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- Consumers concerned about insurers’ ability to handle data securely
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- Figure 34: Barriers to sharing financial data with insurance companies, September 2017
- Convincing consumers of the value exchange
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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