Table of Contents
Introduction and Abbreviations
-
- The underwriting environment improves
- Effects of new rules yet to be fully seen
- Report contents
- Methodology
- Global information and research
- Consumer research
- ACORN
- Abbreviations
Premier Insight
Executive Summary
-
- More households own two cars in 2003
-
- Figure 1: Household ownership of cars, 1998-2003
- The industry returns to profitability
-
- Figure 2: Motor insurance revenue account for all business, 1993-2003
- Claim costs continue to increase
-
- Figure 3: Illustration of total cost of claims and average comprehensive claim, 1990-2002
- Direct Line Group ranked number one in terms of GWP
-
- Figure 4: Top 10 underwriters for private motor risks, by GWP, 2002
- Providers spend most on TV advertising
-
- Figure 5: Total advertising expenditure on motor insurance, by media type used, 2003-04
- Significantly more consumers arrange cover over the Internet
-
- Figure 6: Method used to arrange last motor insurance policy, February 2002 and March 2004
- Consumers are increasingly shopping around
-
- Figure 7: Number of quotes obtained renewing car insurance, February 2002 and March 2004
Market Factors
-
- Increasing PDI will ensure car costs are covered
-
- Figure 8: PDI, savings and expenditure, at current prices, 1999-2009
- The car parc now exceeds 29 million vehicles
-
- Figure 9: Car parc, by type of ownership, 1992-2003
- The rate of new car registrations has slowed
-
- Figure 10: New car registrations, 1992-2004
- The number of female drivers on the road has increased significantly in the last two decades
-
- Figure 11: Full driving licence holders, by age group and gender, 1989-2001
- Two car ownership increases
-
- Figure 12: Household ownership of cars, 1998-2003
- Insurers fight for a diminishing number of young customers
-
- Figure 13: Trends and projections in total UK population, by age group, 2000-08
- EU gender discrimination proposals
- Policy Statement 147
- FSA regulations
- Motor insurance industry debates the cost of repairs
- The consumer credit market in the 21st Century
- Courts Act 2003
Market Size and Trends
-
- Return to profitability
- The nine year spell is broken
-
- Figure 14: Motor insurance revenue account for all business and domestic market, 1993-2003
- The estimated average premium in 2003 was £417
-
- Figure 15: Domestic motor insurance exposure, gross written premiums and average premium rates, at current and constant prices, 1999-2003
- Uptake of comprehensive insurance has risen 13.5 percentage points in the last decade
-
- Figure 16: Motor insurance policies in operation, by type of cover, 1992-2003
Claims Experience
-
- The total number of claims nears 4 million in 2003
-
- Figure 17: Total number of private motor insurance claims, claims frequency and cost ratio, 1996-2003
- Claims inflation relatively low in 2001 and 2002
-
- Figure 18: Value of comprehensive, non-comprehensive and total claims, 1990-2002
- Europe-wide study into TPBI claims
- Electronic Automated Recovery
- Increase in claims value is slowing
-
- Figure 19: Illustration of total cost of claims and average comprehensive claim, 1990-2002
- Cost of average theft claim is highest in 11 years
-
- Figure 20: Motor theft claims, by volume, cost and average claim, 1993-2003
- Repairer costs drive up claim payouts
-
- Figure 21: Price indices for car replacement parts, windscreens and garage charge-out rates compared with RPI, 1994-2004
Pricing and Premiums
-
- Motor insurers take their first steps in a profitable environment
- AA Index shows rise in motor and home premiums since 1994
-
- Figure 22: Illustration of motor insurance and home insurance premiums, 1994-2004
- The MIB levy
-
- Figure 23: The value of the motor insurers’ bureau levy to cover uninsured drivers, 2000-04
- Uninsured searched out by government and motor insurance industry
Key Underwriters
-
- A relatively small number of mergers and acquisitions in 2003
- Offshore activities increased in 2003
- Direct Line leads the way in 2002
-
- Figure 24: Top 15 underwriters for private motor risks, by GWP, 2002
- Most top insurers decreased exposure in 2002
-
- Figure 25: Exposure vehicle years for the top 10 private motor insurers, 2001-02
- Company profiles
-
- Figure 26: Comparison of the top 10 private motor insurers, by market share, 2001-02
- Direct Line
- Norwich Union
- Churchill
- Royal & SunAlliance
- Zurich Financial Services
- CIS
- AXA
- Fortis
- Groupama
- Provident Financial
Distribution and the Internet
-
- Non-traditional distribution channels seize market share
-
- Figure 27: Share of gross written premiums, by distribution channel, 1999-2002
- A rising number of people prefer to buy online
- The online motor insurance market will be worth £1.5 billion by 2008
-
- Figure 28: Forecast of the online motor insurance market, by value, 2004-08
Non-standard Risk
-
- Which consumers fall into the non-standard category?
- Mainstream providers re-evaluate non-standard risk to gain market share
- Embracing non-standard risk will lower the number of uninsured
- Non-standard risks also offer cross-selling opportunities
Advertising and Promotion
-
- Advertising expenditure has risen rapidly over the last few years
-
- Figure 29: Total advertising expenditure on motor insurance, 1999-2003
- Advertising expenditure highest on TV advertising
-
- Figure 30: Total advertising expenditure on motor insurance, by media type used, 2003-04
- Churchill Insurance is the top advertiser
-
- Figure 31: Top ten motor insurance advertisers by expenditure, 2002-04
The Consumer
-
- Around half of the population own motor insurance in their own name
-
- Figure 32: Ownership of motor insurance, by policy type, March 2004
- Men, 35-64-year-olds and ABs are most likely to have comprehensive cover
-
- Figure 33: Ownership of motor insurance, by gender, age and socio-economic sub-group, March 2004
- Ownership of comprehensive cover highest among third age lifestage
-
- Figure 34: Ownership of motor insurance, by marital status, lifestage and Special Groups, March 2004
- Full-time workers and mortgage owners more likely to own comprehensive cover
-
- Figure 35: Ownership of motor insurance, by working status, income and tenure, March 2004
- People in A – Thriving and B – Expanding ACORN categories most likely to own cover
-
- Figure 36: Ownership of motor insurance, by TV region and ACORN category, March 2004
- Owners of comprehensive cover more likely to be light TV viewers
-
- Figure 37: Ownership of motor insurance, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, March 2004
- Non-traditional direct distribution channels show rapid growth
-
- Figure 38: Distribution channel used to purchase car insurance, 2002-04
- The relatively affluent are more likely to purchase cover direct from an insurance company
-
- Figure 39: Distribution channel used to purchase car insurance, by gender, age and socio-economic group, March 2004
- The retired lifestage favour purchasing motor insurance through a broker
-
- Figure 40: Distribution channel used to purchase car insurance, by marital status, lifestage and Mintel’s Special Groups, March 2004
- More affluent consumers prefer direct insurers
-
- Figure 41: Distribution channel used to purchase car insurance, by working status, gross annual household income and tenure, March 2004
- Those people living in C – Rising areas are more likely to buy direct from an insurance company
-
- Figure 42: Distribution channel used to purchase car insurance, by TV region and ACORN category, March 2004
- Marks & Spencer and Waitrose shoppers take the direct route
-
- Figure 43: Distribution channel used to purchase car insurance, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, March 2004
- Mobile phone users, popular tabloid readers and Kwik Save shoppers favour non-traditional direct channels
Consumer Attitudes and Targeting Opportunities
-
- Internet-arranged cover grows rapidly
-
- Figure 44: Method used to arrange last motor insurance policy, February 2002 and March 2004
- Telephone is still most popular method of arranging cover
- Women more likely to arrange cover via the telephone
-
- Figure 45: Method used to arrange last motor insurance policy, by gender, age and socio-economic group, March 2004
- People shopping at Morrisons and Iceland most likely to use the telephone to arrange cover
-
- Figure 46: Method used to arrange last motor insurance policy, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, March 2004
- Growing Internet distribution supports direct providers
-
- Figure 47: Distribution channel used to purchase car insurance, by method used, March 2004
- Providers and consumers remain focused on price
-
- Figure 48: Most important factors influencing choice of current provider, March 2004
- Younger people are more likely to be influenced by price
-
- Figure 49: Most important factors influencing choice of current provider, by gender, age, socio-economic group and marital status, March 2004
- Heavy commercial TV viewers are most influenced by price
-
- Figure 50: Most important factors influencing choice of current provider, by new technology user, newspaper readership, commercial TV viewing and supermarket usage, March 2004
- More customers stick with the same provider
-
- Figure 51: Length of time with current car insurance provider, February 2002 and March 2004
- Older respondents tend to switch less
-
- Figure 52: Length of time with current car insurance provider, by gender, age, socio-economic group, marital status and tenure, March 2004
- Mid-market tabloid readers most likely to be loyal customers
-
- Figure 53: Length of time with current car insurance provider, by new technology user, newspaper readership, commercial TV viewing and supermarket usage, March 2004
- Inertia is responsible for some long-term sales
-
- Figure 54: Length of time with current provider, by most influential factor for choosing provider, March 2004
- Less people choose to simply renew with their current provider
-
- Figure 55: Number of quotes obtained renewing car insurance, February 2002 and March 2004
- Men and the under-35s are most likely to obtain between three and six quotations
-
- Figure 56: Number of quotes obtained, by gender, age, socio-economic group and marital status, March 2004
- Popular tabloid readers and Safeway/Kwik Save shoppers are most likely to obtain between three and six quotations
-
- Figure 57: Number of quotes obtained, by new technology user, newspaper readership, commercial TV viewing and supermarket usage, March 2004
- Multiple-quote seekers are more concerned about price
-
- Figure 58: Number of quotes obtained, by most influential factor for choosing a provider, March 2004
- Loyal customers are most likely to just renew every year
-
- Figure 59: Number of quotes, by length of time with current provider, March 2004
- Consumers are likely to have just one reason to purchase from a provider
-
- Figure 60: Number of reasons for choosing a motor insurance provider, by selected influential factors, March 2004
- Married, ABC1 full-time workers most likely to buy direct from an insurer
-
- Figure 61: Analysis of motor insurance purchasing channel and number of quotations, by main target groups using CHAID, March 2004
Industry Issues
-
- FSA regulations
- Distribution
- Premiums
- Future prospects for the sector
The Future
-
- Non-standard risks will be further embraced by providers
- Claims are unlikely to rise rapidly
- Premiums will stay flat over coming year
- Non-traditional sales channels will continue to increase their distribution share
- General insurers will remain vulnerable
- The next year is crucial for the industry
- The Internet will continue to erode all other methods of distribution
- The Greenaway report
Forecast
-
-
- Figure 62: Forecast of the UK domestic market for motor insurance, 2003-09
- Cheaper, cheaper thinking
- Internet sales: friend or foe?
- Factors incorporated
-
Back to top