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Consumers and General Insurance - UK - December 2014

“Consumers want their insurance providers and policies to be more transparent and to understand their insurance cover better. Underwriting is seen as a dark art and demystifying it is likely to lead to greater levels of consumer trust and higher levels of loyalty”

Alex Hiscox, Senior Analyst – Financial Services

 

This report covers the following issues:

  • Policyholders would reward insurers for greater transparency
  • Publishing claims data can help providers to stand out from the crowd
  • The add-on market is not currently working for consumers

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Table of contents

  1. Introduction

      • Report scope and market definitions
        • Abbreviations
        • Executive Summary

            • The market
              • GWP continued to decrease in 2014
                • Figure 1: General insurance revenue – Retail products – UK risks, by GWP, 2009-14
              • Despite the fall in gross written premiums, underwriting results improved in 2013
                • 87% of consumers own at least one general insurance product
                  • Figure 2: General insurance product ownership, September 2014
                • Companies, brands and innovation
                  • Aviva increased its position as the largest underwriter in 2013
                    • Figure 3: Largest personal lines underwriters, by GWP, 2011-13
                  • General insurance adspend continued to decrease in 2013/14
                    • Figure 4: Topline adspend for general insurance products, 2011/12-2013/14
                  • The consumer
                    • Expenditure on general insurance products
                      • Figure 5: Total amount spent on insurance products, September 2014
                    • Ownership of add-ons and standalone policies
                      • Figure 6: Purchasing of add-ons, September 2014
                    • Attitudes towards add-on products
                      • Figure 7: Attitudes towards add-ons, September 2014
                    • Channels used to purchase general insurance products
                      • Figure 8: Channels used to purchase general insurance products, September 2014
                    • Sources used to research general insurance products
                      • Figure 9: Sources used to research general insurance products, September 2014
                    • Attitudes towards general insurance
                      • Figure 10: Attitudes towards general insurance, September 2014
                    • “They’re not all the same”
                      • What we think
                      • Issues and Insights

                          • Policyholders would reward insurers for greater transparency
                            • The facts
                              • The implications
                                • Publishing claims data can help providers to stand out from the crowd
                                  • The facts
                                    • The implications
                                      • The add-on market is not currently working for consumers
                                        • The facts
                                          • The implications
                                          • Trend Application

                                            • Providers can reassure consumers by exposing their claims process
                                              • Providers can harness technology to improve the customer experience
                                                • Mintel Futures: Generation Next
                                                • General Insurance Market Size

                                                  • Key points
                                                    • Total gross written premiums decreased in 2013…
                                                      • Figure 11: General insurance revenue – Retail products – UK risks, by GWP, 2009-13
                                                    • …yet, underwriting results increased
                                                      • Figure 12: General insurance – Retail products – UK outgo and underwriting result, 2009-13
                                                  • Market Segmentation

                                                    • Key points
                                                      • Motor insurance dominates the general insurance market
                                                        • Figure 13: Share of premium income, by sector, UK general insurance retail products, 2013
                                                      • Underwriting performance improved in all general insurance markets in 2013
                                                        • Figure 14: Underwriting ratio – UK general insurance retail products, 2009-13
                                                      • Motor, household and accident and health reduced their claims ratios
                                                        • Figure 15: Claims ratio – UK general insurance retail products, 2009-13
                                                    • Underwriter Share

                                                      • Key points
                                                        • Aviva remained the largest general insurance underwriter in 2013
                                                          • Figure 16: Largest personal lines underwriters, by GWP, 2011-13
                                                      • Companies and Products

                                                        • Aviva
                                                          • Company background
                                                            • Product range
                                                              • Distribution strategy
                                                                • Key data
                                                                  • Figure 17: Key financial data for Aviva UK & Ireland General Insurance business, Interim results for first nine months, 2013 and 2014
                                                                  • Figure 18: Key financial data for Aviva UK & Ireland General Insurance business, 2012 and 2013
                                                                • Recent activity
                                                                  • Ageas
                                                                    • Company background
                                                                      • Product range
                                                                        • Distribution strategy
                                                                          • Key data
                                                                            • Figure 19: Key financial data for Ageas UK, Non-life insurance business, H1 2013 and H1 2014
                                                                            • Figure 20: Key financial data for Ageas Insurance Limited, UK business, 2012-13
                                                                          • Recent activity
                                                                            • AXA
                                                                              • Company background
                                                                                • Product range
                                                                                  • Distribution strategy
                                                                                    • Key data
                                                                                      • Figure 21: Key financial data for AXA Insurance plc, 2012 and 2013
                                                                                    • Recent activity
                                                                                      • Bupa
                                                                                        • Company background
                                                                                          • Product range
                                                                                            • Distribution strategy
                                                                                              • Key data
                                                                                                • Figure 22: UK market unit results, H1 2013 and H1 2014
                                                                                                • Figure 23: UK market unit results, FY 2012 and FY 2013
                                                                                              • Direct Line Group
                                                                                                • Company background
                                                                                                  • Product range
                                                                                                    • Distribution strategy
                                                                                                      • Key data
                                                                                                        • Figure 24: Key financial data for Direct Line Group, 2012 and 2013
                                                                                                        • Figure 25: Key financial data for Direct Line Group, interim results for the first six months 2013 and 2014
                                                                                                      • Recent activity
                                                                                                        • LV=
                                                                                                          • Company background
                                                                                                            • Product range
                                                                                                              • Distribution strategy
                                                                                                                • Key data
                                                                                                                  • Figure 26: Key financial data for LV= Group, General Insurance business, H1 2013 AND H1 2014
                                                                                                                  • Figure 27: Key financial data for LV=, 2012 and 2013
                                                                                                                • Recent activity
                                                                                                                  • RSA
                                                                                                                    • Company background
                                                                                                                      • Product range
                                                                                                                        • Distribution strategy
                                                                                                                          • Key data
                                                                                                                            • Figure 28: Key financial data for RSA UK Insurance, H1 2013 AND H1 2014
                                                                                                                            • Figure 29: Key financial data for RSA UK Insurance, 2012 and 2013
                                                                                                                          • Recent activity
                                                                                                                          • Brand Communication and Promotion

                                                                                                                            • Key points
                                                                                                                              • General insurance adspend continues to decrease in 2013/14
                                                                                                                                • Figure 30: Topline adspend for general insurance products, 2011/12-2013/14
                                                                                                                              • Adspend on home insurance catches up with car insurance
                                                                                                                                • Figure 31: Adspend, by general insurance category, 2011/12-2013/14
                                                                                                                              • Television continues to be the most popular advertising channel
                                                                                                                                • Figure 32: General insurance adspend, by media type, 2011/12-2013/14
                                                                                                                              • Direct Line remains the largest advertising spender but the gap has narrowed
                                                                                                                                • Figure 33: Top 20 general insurance advertisers, 2011/12 -2013/14
                                                                                                                              • A note on adspend
                                                                                                                              • General Insurance Product Ownership

                                                                                                                                • Key points
                                                                                                                                  • Only 13% of consumers don’t own a general insurance product
                                                                                                                                    • Figure 34: General insurance product ownership, September 2014
                                                                                                                                  • Under-25s less likely to own insurance products
                                                                                                                                    • Figure 35: General insurance product ownership, by age, September 2014
                                                                                                                                    • Figure 36: General insurance product ownership, by age, September 2014 (continued)
                                                                                                                                  • Consumers who are struggling financially are less likely to own general insurance products…
                                                                                                                                    • Figure 37: General insurance product ownership, by socio-economic status, gross annual household income and financial situation, September 2014
                                                                                                                                    • Figure 38: General insurance product ownership, by socio-economic status, gross annual household income and financial situation, September 2014 (continued)
                                                                                                                                  • …as are those in rented accommodation
                                                                                                                                    • Figure 39: General insurance product ownership, by accommodation status, September 2014
                                                                                                                                    • Figure 40: General insurance product ownership, by Accommodation status, September 2014 (continued)
                                                                                                                                • Amount Spent on General Insurance Products

                                                                                                                                  • Key points
                                                                                                                                    • The most common amount to spend on insurance per month is £21-£50
                                                                                                                                      • Figure 41: Total amount spent on insurance products, September 2014
                                                                                                                                    • Amount spent on insurance products remains similar across differing age groups…
                                                                                                                                      • Figure 42: Total amount spent on insurance products, by age, September 2014
                                                                                                                                    • …however, affordability limits spending on insurance products for lower earners
                                                                                                                                      • Figure 43: Total amount spent on insurance products, by socio-economic status, gross annual household income and financial situation, September 2014
                                                                                                                                    • Car insurance drives up consumers total general insurance cost
                                                                                                                                      • Figure 44: Total amount spent on insurance products, by general insurance product ownership, September 2014
                                                                                                                                  • Purchasing of Add-ons

                                                                                                                                    • Key points
                                                                                                                                      • Add-ons are popular in many insurance markets, despite negative publicity
                                                                                                                                        • Figure 45: Purchasing of add-ons, September 2014
                                                                                                                                      • Car insurance owners are looking for more control
                                                                                                                                        • Travel and mobile phone insurance are the two most popular add-ons
                                                                                                                                          • Regulators need to balance the popularity of add-on cover against the risk of inappropriate sales
                                                                                                                                          • Attitudes towards Add-ons

                                                                                                                                            • Key points
                                                                                                                                              • Concerns about consumer understanding of add-on insurance
                                                                                                                                                • Figure 46: Attitudes towards add-ons, September 2014
                                                                                                                                              • Consumers less likely to shop around when purchasing add-ons…
                                                                                                                                                • …however, some consumers prefer convenience to price
                                                                                                                                                  • There’s a risk that many consumers are covered twice
                                                                                                                                                    • Add-on policyholders often look for cost at the expense of understanding the level of cover
                                                                                                                                                      • Figure 47: Attitudes towards add-ons, by attitudes towards add-ons
                                                                                                                                                  • Channels Used to Purchase General Insurance Products

                                                                                                                                                    • Key points
                                                                                                                                                      • Online purchasing channels dominate in the general insurance market
                                                                                                                                                        • Figure 48: Channels used to purchase general insurance products, September 2014
                                                                                                                                                      • Face-to-face sales remain popular in the mobile insurance market
                                                                                                                                                        • Smartphones and tablets represent a small, but growing section of the market
                                                                                                                                                        • Sources Used to Research General Insurance Products

                                                                                                                                                          • Key points
                                                                                                                                                            • Price comparison websites are vital in helping consumers to navigate general insurance markets
                                                                                                                                                              • Figure 49: Sources used to research general insurance products, by general insurance product ownership, September 2014
                                                                                                                                                            • Only 15% of policyholders used an adviser to help them to research the market
                                                                                                                                                              • Consumers who spend more on insurance are more likely to research
                                                                                                                                                                • Figure 50: Sources used to research general insurance products, by total amount spent on insurance products, September 2014
                                                                                                                                                            • Attitudes towards General Insurance

                                                                                                                                                              • Key points
                                                                                                                                                                • Consumers want to be able to easily compare their renewal quotes
                                                                                                                                                                  • Figure 51: Attitudes towards general insurance, September 2014
                                                                                                                                                                • Consumers more likely to buy from an insurer that explained how premiums are calculated
                                                                                                                                                                  • Policyholders have a low estimation of general insurance providers
                                                                                                                                                                    • Consumers can reward trusted providers with loyalty
                                                                                                                                                                      • Lower income groups are more likely to find buying insurance complicated
                                                                                                                                                                        • Figure 52: Attitudes towards general insurance, by socio-economic status, gross annual household income and financial situation, September 2014
                                                                                                                                                                      • Younger consumers are prepared to pay more for companies with good claims records
                                                                                                                                                                        • Figure 53: Consumers who agree with the following statements about general insurance, by age, September 2014

                                                                                                                                                                    Companies Covered

                                                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                                                    Consumers and General Insurance - UK - December 2014

                                                                                                                                                                    £2,195.00 (Excl.Tax)