Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Home Insurance - UK - November 2013

“The cost of a policy relative to the competition is the primary factor that determines whether or not a home insurance policyholder stays with their existing provider after shopping around. The good news for providers is that customers are generally willing to tolerate a slight increase in premiums. However, raising premiums too quickly or steeply will create an opportunity for another provider to steal away business.”

– George Zaborowski, Senior Analyst – Financial Services

Some questions answered in this report include:

  • What’s behind the softening in home insurance premiums and will it last?
  • How can contents insurance ownership among renters be expanded?
  • Which channels give providers the best chance of a sale?
  • What can providers do to reduce switching activity?

While the market has performed well during the past several years, the economic slowdown and weak housing market have held it back from its true potential. Pressure on household incomes has motivated many to cut back on spending wherever possible, and for some this may have resulted in trading down or cancelling existing cover. Meanwhile, with ownership levels directly linked to property ownership, the buildings insurance segment has been held back by the general lack of mortgage lending.

In this report Mintel conducts a broad investigation of the home insurance market. The detailed Market Size and Forecast section shows where the market has been and where it is likely headed, while the Channels to Market section explores trends in distribution. In addition to highlighting changes in market share, the sector’s major insurance companies are profiled. In the final sections of the report the reader is presented with analysis of Mintel’s exclusive consumer research, which provides insight into how consumers research and arrange policies, what key factors they look for in home insurance, as well as policy renewal and switching activity.

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Introduction

      • Abbreviations
      • Executive Summary

          • The market
            • Steady rise in gross written premiums set to resume
              • Figure 1: Gross written domestic property insurance premiums – fan chart, 2008-18
            • Sector segmentation
              • Three-fifths of policies sold via intermediaries and bancassurance
                • Market factors
                  • Improvement in economic performance and housing market
                    • Home insurance premiums have softened but remain susceptible to sudden rises
                      • Figure 2: Average home insurance market and shoparound* premiums (quarterly basis), October 2009-October 2013
                    • Number of claims continues to fall but average values have risen by 9% since 2007
                      • Companies, brands and innovation
                        • Direct Line Group, LBG and Aviva in a close battle for the top spot in the market
                          • Figure 3: Top five domestic property insurance parent groups, by GWP, 2012
                        • Aviva and Direct Line are the most trusted brands
                          • Figure 4: Attitudes towards and usage of brands in the home insurance sector, July 2013
                        • Home insurance adspend down by 21% in 2013
                          • Provider innovations and developments
                            • The consumer
                              • Three in four adults own a home insurance product
                                • Figure 5: Ownership of home insurance and other types of general insurance, September 2013
                              • More use price comparison sites for researching than for purchasing
                                • Figure 6: Channels used to research and arrange a home insurance policy, September 2013
                              • Most choose providers based upon which can provide the cheapest quote
                                • Figure 7: Important factors when choosing a home insurance provider, September 2013
                              • The vast proportion of consumers prefer contents cover for all their belongings
                                • Figure 8: Home insurance policy preferences, September 2013
                              • Three in 10 switched providers at last renewal
                                • Figure 9: Action taken at last home insurance policy renewal, September 2013
                              • Switching less likely if customers feel they’re getting a fair deal
                                • Figure 10: Reasons for staying with existing provider after shopping around, September 2013
                              • What we think
                              • Issues in the Market

                                  • What’s behind the softening in home insurance premiums and will it last?
                                    • How can contents insurance ownership among renters be expanded?
                                      • Which channels give providers the best chance of a sale?
                                        • What can providers do to reduce switching activity?
                                        • Trend Application

                                          • When spending a little bit more gets you a lot more
                                            • One provider is better than many
                                              • The home insurance claims process is going mobile
                                              • Market Drivers

                                                • Key points
                                                  • Signs of life in the economy and housing market
                                                    • Buildings and contents premiums softening…
                                                      • Figure 11: Average home insurance market and shoparound* premiums (quarterly basis), October 2009-October 2013
                                                    • …but how long will this last?
                                                      • Contents policy pricing is more consistent but demand is variable
                                                        • Figure 12: RPI and consumer durables index, 2000-12
                                                      • Subsidised insurance for high flood risk areas set to push up premiums
                                                        • Number of claims continues to fall
                                                          • Figure 13: Total number of domestic property claims and cost incurred, 2007-12
                                                        • Weather-related claims increase in 2012
                                                          • Figure 14: Proportional distribution of domestic property claims, by type of peril, 2009-H1 2013
                                                        • St Jude’s storm will push up weather related claims in H2 2013
                                                          • Figure 15: Detected general insurance fraud, by claims value, 2007-12
                                                        • Fraud detection on the rise
                                                        • Who’s Innovating?

                                                          • Key points
                                                            • L&G joins ‘Bought by Many’ to offer discount premiums to customers
                                                              • L&G launches home insurance for mid- and high-net-worth customers
                                                                • British Gas enters the home insurance market
                                                                  • Zurich launches app for home insurance customers
                                                                  • Market Size and Forecast

                                                                    • Key points
                                                                      • Gross premiums stagnate in 2012
                                                                        • Figure 16: Gross and net written premiums – domestic property insurance, 2002-13
                                                                      • A modest rise in gross premiums expected for 2013
                                                                        • Sector split
                                                                          • Industry generates a 3.5% underwriting profit in 2012…
                                                                            • Figure 17: Domestic property insurance underwriting ratio, 2002-12
                                                                          • …despite a 5% rise in net claims costs
                                                                            • Figure 18: Gross and net written premiums – domestic property insurance, 2007-12
                                                                          • Market forecast
                                                                            • Figure 19: Gross written domestic property insurance premiums – fan chart, 2008-18
                                                                            • Figure 20: Forecast of gross written premiums – domestic property insurance, 2008-18
                                                                          • Forecast methodology
                                                                            • Fan chart explanation
                                                                            • Market Share

                                                                              • Key points
                                                                                • Direct Line Group the top home insurance provider
                                                                                  • Figure 21: Largest 15 parent groups active in the domestic property market, by GWP, 2012
                                                                                • AXA and L&G gain market share in 2012
                                                                                  • Figure 22: Top eight domestic property insurance parent groups, by GWP, 2011-12
                                                                              • Companies and Products

                                                                                  • Direct Line Group
                                                                                    • Company description
                                                                                      • 2012 position in the domestic home market
                                                                                        • Home insurance product range
                                                                                          • Distribution
                                                                                            • Recent financial performance
                                                                                              • Figure 23: Key financial data for Direct Line Group (Home), 2011 and 2012
                                                                                              • Figure 24: Key financial data for Direct Line Group (Home), H1 2012 and H1 2013
                                                                                            • Recent activity
                                                                                              • Lloyds Banking Group
                                                                                                • Company description
                                                                                                  • 2012 position in the domestic home market
                                                                                                    • Home insurance product range
                                                                                                      • Distribution
                                                                                                        • Recent financial performance
                                                                                                          • Figure 25: Key financial data for Lloyds Banking Group (General Insurance), 2011 and 2012
                                                                                                          • Figure 26: Key financial data for Lloyds Banking Group (General Insurance), H1 2012 and H2 2013
                                                                                                        • Recent activity
                                                                                                          • Aviva
                                                                                                            • Company description
                                                                                                              • 2012 position in the domestic home market
                                                                                                                • Home insurance product range
                                                                                                                  • Distribution
                                                                                                                    • Recent financial performance
                                                                                                                      • Figure 27: Key financial data for Aviva (UK and Ireland general insurance), 2011 and 2012
                                                                                                                      • Figure 28: Key financial data for Aviva (UK and Ireland general insurance), H1 2012 and H1 2013
                                                                                                                    • Recent activity
                                                                                                                      • RSA Group
                                                                                                                        • Company description
                                                                                                                          • 2012 position in the domestic home market
                                                                                                                            • Home insurance product range
                                                                                                                              • Distribution
                                                                                                                                • Recent financial performance
                                                                                                                                  • Figure 29: Key financial data for RSA (UK personal, household), 2011 and 2012
                                                                                                                                  • Figure 30: Key financial data for RSA (UK personal, household), H1 2012 and H1 2013
                                                                                                                                • Recent activity
                                                                                                                                  • AXA UK
                                                                                                                                    • Company description
                                                                                                                                      • 2012 position in the domestic home market
                                                                                                                                        • Home insurance product range
                                                                                                                                          • Distribution
                                                                                                                                            • Recent financial performance
                                                                                                                                              • Figure 31: Key financial data for AXA (UK and Ireland, property and casualty), 2011 and 2012
                                                                                                                                              • Figure 32: Key financial data for AXA (UK and Ireland, property and casualty), H1 2012 and H1 2013
                                                                                                                                            • Recent activity
                                                                                                                                            • Brand Research

                                                                                                                                              • Brand map
                                                                                                                                                  • Figure 33: Attitudes towards and usage of brands in the home insurance sector, July 2013
                                                                                                                                                • Correspondence analysis
                                                                                                                                                  • Brand attitudes
                                                                                                                                                    • Figure 34: Attitudes, by home insurance brand, July 2013
                                                                                                                                                  • Brand personality
                                                                                                                                                    • Figure 35: Home insurance brand personality – macro image, July 2013
                                                                                                                                                    • Figure 36: Home insurance brand personality – micro image, July 2013
                                                                                                                                                  • Brand experience
                                                                                                                                                    • Figure 37: Home insurance brand usage, July 2013
                                                                                                                                                    • Figure 38: Satisfaction with various home insurance brands, July 2013
                                                                                                                                                    • Figure 39: Consideration of home insurance brands, July 2013
                                                                                                                                                    • Figure 40: Consumer perceptions of current home insurance brand performance, July 2013
                                                                                                                                                  • Brand index
                                                                                                                                                    • Figure 41: Home insurance brand index, July 2013
                                                                                                                                                  • Target group analysis
                                                                                                                                                    • Figure 42: Target groups, July 2013
                                                                                                                                                    • Figure 43: Home insurance brand usage, by target groups, July 2013
                                                                                                                                                  • Group One – Conformists
                                                                                                                                                    • Group Two – Simply the Best
                                                                                                                                                      • Group Three – Shelf Stalkers
                                                                                                                                                        • Group Four – Habitual Shoppers
                                                                                                                                                          • Group Five – Individualists
                                                                                                                                                          • Brand Communication and Promotion

                                                                                                                                                            • Key points
                                                                                                                                                              • Home insurance adspend declines in 2013
                                                                                                                                                                • Figure 44: Topline advertising expenditure on home insurance, 2009-13
                                                                                                                                                              • TV advertising has been cut in half
                                                                                                                                                                • Figure 45: Advertising expenditure on home insurance, by media type, 2011-13
                                                                                                                                                              • Direct Line reduces adspend by £10 million but remains the top advertiser
                                                                                                                                                                • Figure 46: Top 15 advertisers of home insurance, 2011-13
                                                                                                                                                              • Note about NMR data
                                                                                                                                                              • Channels to Market

                                                                                                                                                                • Key points
                                                                                                                                                                  • Price comparison websites the most popular way to arrange a policy
                                                                                                                                                                    • Figure 47: Channels used to arrange a home insurance policy, September 2013
                                                                                                                                                                  • Providers taking a varied approach to price comparison sites
                                                                                                                                                                    • A third of policies sold via intermediaries
                                                                                                                                                                      • Figure 48: Domestic property insurance sales (GWP), by distribution channel, 2008-12
                                                                                                                                                                  • Home Insurance Ownership

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Three quarters of adults own a home insurance product
                                                                                                                                                                        • Figure 49: Ownership of home insurance and other types of general insurance, September 2013
                                                                                                                                                                      • Home contents insurance ownership directly tied to tenure
                                                                                                                                                                        • Figure 50: Ownership of home insurance and related products, by tenure, September 2013
                                                                                                                                                                      • Raising home contents insurance ownership among renters
                                                                                                                                                                        • Room to expand home insurance ownership among under-35s
                                                                                                                                                                          • Figure 51: Home insurance ownership, by gender, age, socio-economic group and gross annual household income, September 2013
                                                                                                                                                                      • Researching and Purchasing Home Insurance

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Three in four use the internet to research home insurance
                                                                                                                                                                            • Figure 52: Channels used to research home insurance, September 2013
                                                                                                                                                                          • Nearly three in five policies arranged via an online channel
                                                                                                                                                                            • Figure 53: Channels used to arrange a home insurance policy, September 2013
                                                                                                                                                                          • Offline channels provide the best chance for a sale
                                                                                                                                                                            • Figure 54: Comparison of channels used to research and purchase home insurance, September 2013
                                                                                                                                                                          • The case for staying off price comparison websites
                                                                                                                                                                            • Three in 10 who use a price comparison site for research buy direct
                                                                                                                                                                              • Figure 55: Channels used to arrange home insurance, by channels used to research home insurance, September 2013
                                                                                                                                                                          • Important Factors when Choosing a Home Insurance Provider

                                                                                                                                                                            • Key points
                                                                                                                                                                              • The cheapest quote the deciding factor for two thirds of customers
                                                                                                                                                                                • Figure 56: Important factors when choosing a home insurance provider, September 2013
                                                                                                                                                                              • Younger consumers more likely to be influenced by the cheapest quote...
                                                                                                                                                                                • …while older customers are more heavily tied to well-known brands
                                                                                                                                                                                  • Those buying direct more likely to consider other factors than just price
                                                                                                                                                                                    • Figure 57: Important factors when choosing a home insurance provider, by channel used to arrange home insurance, September 2013
                                                                                                                                                                                  • Overwhelming preference for contents policies that provide full coverage
                                                                                                                                                                                    • Figure 58: Home contents insurance policy preferences, September 2013
                                                                                                                                                                                  • Technological innovations will help to ensure proper levels of coverage
                                                                                                                                                                                  • Policy Renewal and Switching Activity

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Three in 10 switched providers at renewal
                                                                                                                                                                                        • Figure 59: Action taken at last home insurance policy renewal, September 2013
                                                                                                                                                                                      • Homeowners more likely than renters to have switched
                                                                                                                                                                                        • Few consumers are loyal to just one brand
                                                                                                                                                                                          • Figure 60: Provider loyalty, September 2013
                                                                                                                                                                                        • If the price is right customers are likely to stick around
                                                                                                                                                                                          • Figure 61: Reasons for staying with existing provider after shopping around, September 2013
                                                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                                                          • Figure 62: Best case/worse case forecast of gross written premiums – domestic property insurance, 2013-18
                                                                                                                                                                                      • Appendix – Brand Research

                                                                                                                                                                                          • Figure 63: Brand usage, July 2013
                                                                                                                                                                                          • Figure 64: Brand commitment, July 2013
                                                                                                                                                                                          • Figure 65: Brand momentum, July 2013
                                                                                                                                                                                          • Figure 66: Brand diversity, July 2013
                                                                                                                                                                                          • Figure 67: Brand satisfaction, July 2013
                                                                                                                                                                                          • Figure 68: Brand attitude, June 2013
                                                                                                                                                                                          • Figure 69: Brand image – macro image, July 2013
                                                                                                                                                                                          • Figure 70: Brand image – micro image, July 2013
                                                                                                                                                                                          • Figure 71: Profile of target groups, by demographics, July 2013
                                                                                                                                                                                          • Figure 72: Psychographic segmentation by target groups, July 2013
                                                                                                                                                                                          • Figure 73: Brand usage, by target groups, July 2013
                                                                                                                                                                                        • Brand index
                                                                                                                                                                                          • Figure 74: Brand index, July 2013
                                                                                                                                                                                      • Appendix – Home Insurance Ownership

                                                                                                                                                                                          • Figure 75: Ownership of home insurance and related products, by demographics, September 2013
                                                                                                                                                                                      • Appendix – Researching and Purchasing Home Insurance

                                                                                                                                                                                          • Figure 76: Most popular channels used to research home insurance, by demographics, September 2013
                                                                                                                                                                                          • Figure 77: Next most popular channels used to research home insurance, by demographics, September 2013
                                                                                                                                                                                          • Figure 78: Most popular channels used to arrange a home insurance policy, by demographics, September 2013
                                                                                                                                                                                          • Figure 79: Next most popular channels used to arrange a home insurance policy, by demographics, September 2013
                                                                                                                                                                                      • Appendix – Important Factors when Choosing a Home Insurance Provider

                                                                                                                                                                                          • Figure 80: Important factors when choosing a home insurance provider, by demographics, September 2013
                                                                                                                                                                                          • Figure 81: Important factors when choosing a home insurance provider, by demographics, September 2013 (continued)
                                                                                                                                                                                          • Figure 82: Home insurance policy preferences, by demographics, September 2013
                                                                                                                                                                                      • Appendix – Policy Renewal and Switching Activity

                                                                                                                                                                                          • Figure 83: Action taken at last home insurance policy renewal, by demographics, September 2013
                                                                                                                                                                                          • Figure 84: Action taken at last home insurance policy renewal, by demographics, September 2013 (continued)
                                                                                                                                                                                          • Figure 85: Most popular reasons for staying with existing provider after shopping around, by demographics, September 2013
                                                                                                                                                                                          • Figure 86: Next most popular reasons for staying with existing provider after shopping around, by demographics, September 2013
                                                                                                                                                                                          • Figure 87: Provider loyalty, by demographics, September 2013

                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                      • Aviva Plc
                                                                                                                                                                                      • AXA UK plc
                                                                                                                                                                                      • British Gas
                                                                                                                                                                                      • Direct Line Group Limited
                                                                                                                                                                                      • Grupo Santander UK
                                                                                                                                                                                      • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                                                                      • Lloyds Banking Group
                                                                                                                                                                                      • NatWest
                                                                                                                                                                                      • Royal Bank of Scotland Group plc
                                                                                                                                                                                      • RSA
                                                                                                                                                                                      • Swiftcover

                                                                                                                                                                                      Home Insurance - UK - November 2013

                                                                                                                                                                                      £1,995.00 (Excl.Tax)