Home Insurance - UK - December 2018

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Mintel forecasts a slow recovery for the market
Figure 1: Forecast for gross written premiums – UK domestic property insurance, 2013-23
Number of claims falls
Figure 2: Total number of domestic property claims, 2008-17
Brokers account for the largest proportion of sales
Figure 3: Share of gross domestic property insurance premiums, by sales channel, 2013-17
Combined policy costs fall
Figure 4: Average combined, buildings-only and contents-only insurance premiums, 2012-17
FCA announces investigation into motor and home insurance
Companies and brands
Share of top five grows
Figure 5: Top 20 domestic property underwriters – UK, by share of total market GWP – ABI members only, 2016 and 2017
Simplification of application and claims process
Adspend increases by 17%
Figure 6: Total above-the-line, online display and direct mail advertising expenditure on home insurance, 2014-18*
The consumer
Two thirds have home insurance
Figure 7: Insurance product ownership, October 2018
Half consult price comparison sites
Figure 8: Sources of home insurance information, October 2018
Trust is a key driver of PCW use
Figure 9: Trust in different sources of information, October 2018
Accidental damage is the most popular add-on
Figure 10: Interest in paying extra for home insurance add-ons, by policy ownership, October 2018
Around one in three are interested in smart security devices
Figure 11: Ownership and interest in smart devices for the home, October 2018
Home insurers can add value in a number of ways
Figure 12: Attitudes towards home insurance, October 2018
What we think
ISSUES AND INSIGHTS
Innovations will help insurers to engage the younger demographic
The facts
The implications
Trust in information drives usage of PCWs
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Mintel forecasts a slow recovery for the market
Number of claims falls
Brokers account for the largest proportion of sales
Combined policy costs fall
FCA announces investigation into motor and home insurance
MARKET SIZE AND FORECAST
Market sees second year of growth in 2017
Figure 13: Gross and net written premiums – UK domestic property insurance, 2008-18
Mintel forecasts a slow recovery for the market
Figure 14: Forecast for gross written premiums – UK domestic property insurance, 2013-23
Figure 15: Forecast for gross written premiums – UK domestic property insurance, at 2018 prices, 2013-23
Forecast methodology
CLAIMS INCURRED AND UNDERWRITING RESULT
Net claims incurred rise by 6%
Figure 16: Total outgo and underwriting result – UK domestic property insurance, 2013-17
Underwriting ratio remains positive at 7.9%
Figure 17: Domestic property insurance underwriting ratio, 2008-17
Number of claims falls
Figure 18: Total number of domestic property claims, 2008-17
A third of claims are for accidental damage
Figure 19: Proportional distribution of domestic property claims, by type of peril, 2017
CHANNELS TO MARKET
Brokers account for the largest proportion of sales
Figure 20: Share of gross domestic property insurance premiums, by sales channel, 2013-17
MARKET DRIVERS
IPT stays at 12%
Figure 21: Changes to the standard rate of IPT, 2011-18
Majority of policies are sold as combined
Figure 22: Proportional distribution of home insurance sales, by product type, 2017
Combined policy costs fall
Figure 23: Average combined, buildings-only and contents-only insurance premiums, 2012-17
REGULATORY AND LEGISLATIVE CHANGES
FCA announces investigation into motor and home insurance
The industry is already making changes
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Share of top five grows
Simplification of application and claims process
Adspend increases by 17%
MARKET SHARE
Share of top five grows
Figure 24: Top 20 domestic property underwriters – UK, by share of total market GWP – ABI members only, 2016 and 2017
Figure 25: Largest current account providers and their home insurance underwriters, 2018
COMPETITIVE STRATEGIES
Simplification of application and claims process
Homelyfe
Figure 26: Homelyfe locker
Aviva
Using technology to add value
Buzzvault
Brolly
Figure 27: Brolly mobile app
Trōv
Availability of smart home insurance remains limited
Neos
Aviva
AXA
Amazon
ADVERTISING AND MARKETING ACTIVITY
Adspend increases by 17%
Figure 28: Total above-the-line, online display and direct mail advertising expenditure on home insurance, 2014-18*
Gocompare.com is the biggest spender on home insurance advertising
Figure 29: Total above-the-line, online display and direct mail advertising expenditure on home insurance, by advertiser, 2014-18
Nearly half of all spend on TV
Figure 30: Total above-the-line, online display and direct mail advertising expenditure on home insurance, by media type, 2016-18
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Two thirds have home insurance
Half consult price comparison sites
Trust is a key driver of PCW use
Accidental damage is the most popular add-on
Around one in three interested in smart security devices
Home insurers can add value in a number of ways
INSURANCE PRODUCT OWNERSHIP
Two thirds have home insurance
Figure 31: Insurance product ownership, October 2018
Significant difference in ownership between renters and homeowners
Figure 32: Insurance product ownership, October 2018
SOURCE OF INFORMATION
Half consult price comparison sites…
…whilst 23% go direct
Figure 33: Sources of home insurance information, October 2018
Recommendations are key for new customers
Figure 34: Sources of home insurance information, by age, October 2018
TRUST IN DIFFERENT INFORMATION SOURCES
Trust is a key driver of PCW use
High level of trust in information from insurers
Figure 35: Trust in different sources of information, October 2018
Lettings agents have a role to play...but lack of trust is an issue
Figure 36: Trust in different sources of information – ‘Yes’, by housing situation, October 2018
INTEREST IN HOME INSURANCE ADD-ONS
Accidental damage is the most popular add-on
Figure 37: Interest in paying extra for home insurance add-ons, by policy ownership, October 2018
Interest falls for other forms of cover
MOST APPEALING HOME INSURANCE FEATURES
Low excess is a key feature
Figure 38: Top three appealing features when considering a home insurance policy, October 2018
Replacement goods can add tangible value to insurance
Time is precious
Tools and speed will appeal to new customers
Figure 39: Top three appealing features when considering a home insurance policy, by age, October 2018
OWNERSHIP AND INTEREST IN SMART DEVICES
Around one in three interested in smart security devices
Figure 40: Ownership and interest in smart devices for the home, October 2018
Interest is higher among young people
Figure 41: Ownership and interest in smart devices for the home – ‘No, but interested in having’, by age, October 2018
Half would share smart device data
Figure 42: Willingness to give an insurer access to the data collected by a smart device, October 2018
ATTITUDES TOWARDS HOME INSURANCE
Vast majority are confident in their policy
Figure 43: Attitudes towards home insurance, October 2018
Opportunities for insurers to extend their brand
Open Banking
Online only
Home safety
Figure 44: Home insurance – CHAID – Tree output, October 2018
Loyalty undermined by the need to switch each year
Figure 45: Attitudes towards home insurance, by policy ownership, October 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
CHAID Methodology
APPENDIX – MARKET SIZE AND FORECAST
Home insurance value forecast
Figure 46: Best- and worst-case forecasts for gross written premiums – UK domestic property insurance, 2018-23
Forecast methodology