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Consumers and General Insurance - UK - December 2015
Overview
 
What you need to know
The general insurance market is defined by intense price competition. Price comparison sites dominate the largest products in home and motor insurance, paving the way for customers to follow their overriding motivation to seek out the best value.

Insurers are being pushed to their limits as they try to understand and respond to consumers’ concept of value. Some people treat products as such commodities that there is little beyond price that seems to influence which insurer they choose. The rise of freebies and giveaways, as pioneered by comparison sites, is the ultimate indication that people see little difference in the market. This is an ongoing concern for insurers, but also for the protection of consumer interests. The longer the obsessive value-seeking behaviour continues, the less likely customers will have access to quality cover, as insurers simply won’t be commercially capable or incentivised to deliver it. All the while, the majority of people believe insurance prices are continuously rising. This attitude only serves to exacerbate the price pressure, encouraging the potential pursuit of false economy.

Although uptake remains marginal, technology has the potential to deliver differentiation if insurers can get it right. Insurers can piggy-back on high-profile product launches such as the Apple Watch (as seen in health insurance), although choosing style over substance has its risks. Removing barriers to the best technology and making it clear that uptake leads to lower premiums will help customers overcome initial reluctance and enable insurers to turn customer data into profit.

This report investigates the dynamics of competition in the general insurance market and reviews key market data. The report also includes analysis of Mintel’s exclusive consumer data, which reveals product ownership and insurance management behaviour as well as attitudes towards insurance and providers.

Report scope and market definitions
This report is a consumer research-focused overview of the UK personal lines general insurance market.

General insurance is insurance that covers (non-life) risks for a limited period, typically one year.

The main sectors within the personal lines market are:

●	Motor – motor policies cover the legal liabilities arising from the use of a motor vehicle, such as a private car or motorcycle. Comprehensive policies additionally cover damage to the vehicle (see Motor Insurance – UK, March 2015 for more information).
●	Household – household policies cover specified property that may be damaged or destroyed by events or perils such as fire, storm, subsidence or theft (see Home Insurance – UK, December 2015 for more information).
●	Accident and health – comprises two main types of business: personal accident and medical expenses. Personal accident policies will pay a lump sum or weekly benefits in the event of accidental death or a specified injury. Private medical insurance (PMI) will pay the costs of medical treatment for acute conditions (see Private Medical Insurance – UK, October 2015 for more information).
●	Misc and pecuniary loss – relates to financial losses that may have occurred, includes travel insurance (Travel Insurance – UK, February 2015), pet insurance (Pet Insurance – UK, August 2015), legal expenses etc.

Gross written premium (GWP) – premium income accepted during the year, which is quoted gross of reinsurance ceded, but net of reinsurance accepted.

Net written premium (NWP) – premium income net of reinsurance ceded but gross of commission, and excluding Insurance Premium Tax.

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