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 - October 2012

“The fundamental change in distribution patterns brought on by the internet and proliferation of price comparison websites has created a window of opportunity for new brands to enter the market. It is imperative that any new brands currently considering entering the market act now while the opportunity to establish a presence is still ripe.”

– George Zaborowski, Senior Financial Services Analyst

Some questions answered in this report include:

  • How can home contents policy ownership be expanded further?
  • Is not appearing on price comparison websites a good strategy?
  • Does shopping around lead to increased switching activity?
  • With competition increasingly price driven, does brand matter anymore?

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
            • Gross premiums to maintain their steady ascent
              • Figure 1: Gross written domestic property insurance premiums – fan chart, 2007-17
            • Sector split
              • Majority of policies sold via independent intermediaries or bancassurance
                • Market factors
                  • New business growth hindered by the weak economy
                    • Weather-related risks continue to push up home insurance premiums
                      • Number of claims in ongoing decline but their value still growing slightly
                        • Figure 2: Total number of domestic property claims and cost incurred, 2006-11
                      • Companies, brands and innovation
                        • RBS and Lloyds Banking Group account for 30% of market share
                          • Figure 3: Top ten domestic property insurance parent groups, by GWP, 2011
                        • Home insurance adspend creeps up in 2012
                          • New technology and regulation spur on innovation
                            • The consumer
                              • Seven in ten UK adults own a home insurance product
                                • Figure 4: Ownership of home insurance and related products, August 2012
                              • Two thirds stayed with their provider at last renewal
                                • Figure 5: Action taken at last home insurance policy renewal, August 2012
                              • Price comparison site usage is widespread but many arrange cover elsewhere
                                • Figure 6: Channel used when obtaining home insurance quotations, August 2012
                              • Obtaining 3 to 5 quotes is the norm
                                • Figure 7: Number of quotes obtained when shopping around for a home insurance policy, August 2012
                              • Quality and cost of cover take priority over brand name
                                • Figure 8: Importance of home insurance product features, August 2012
                              • What we think
                              • Issues in the Market

                                  • How can home contents policy ownership be expanded further?
                                    • Is not appearing on price comparison websites a good strategy?
                                      • Does shopping around lead to increased switching activity?
                                        • With competition increasingly price driven, does brand matter anymore?
                                        • Trend Application

                                          • Being under or overinsured set to be a thing of the past
                                            • DIY and furniture retailers well positioned to enter home insurance market
                                              • Extreme weather risks call for ongoing insurer-government collaboration
                                              • Market Drivers

                                                • Key points
                                                  • Weak economy and housing market hinder growth in new business
                                                    • Buildings and contents premiums set to continue rising…
                                                      • Figure 9: Average home insurance market and shoparound* premiums (quarterly basis), January 2006-July 2012
                                                    • … with the cost of buildings premiums growing ahead of contents
                                                      • Figure 10: RPI and consumer durables index, January 2006-April 2012
                                                    • … but demand for contents is far more elastic
                                                      • Premiums may rise so those in flood prone areas can obtain cover
                                                        • Claim numbers in decline but the overall value of claims remain steady
                                                          • Figure 11: Total number of domestic property claims and cost incurred, 2006-11and 2011 H1-2012 H1
                                                        • Escape of water and weather main sources of claim activity
                                                          • Figure 12: Proportional distribution of domestic property claims, by type of peril, 2008 -11 and H1 2012
                                                        • Domestic property fraud detection lags behind overall industry
                                                          • Figure 13: Detected general insurance fraud, by claims value, 2006-11
                                                        • ABI forging partnerships to further improve fraud detection
                                                        • SWOT Analysis

                                                            • Figure 14: UK domestic property insurance market – SWOT analysis, 2012
                                                        • Who’s Innovating?

                                                          • Key points
                                                            • L&G launches “Interactive House”
                                                              • Zombies and virtual burglaries
                                                                • Quotemehappy.com releases smartphone app
                                                                  • Virtual catalogues
                                                                  • Market Size and Forecast

                                                                    • Key points
                                                                      • Gross premiums rise to £6.9 million in 2011
                                                                        • Figure 15: Gross and net written premiums – domestic property insurance, 2001-12
                                                                      • Premiums expected to continue rising in 2012
                                                                        • Sector segmentation
                                                                          • Domestic property market turns a 9% underwriting profit in 2011
                                                                            • Figure 16: Domestic property insurance underwriting ratio, 2001-11
                                                                          • Net claims fall by 11%
                                                                            • Figure 17: Gross and net written premiums – domestic property insurance, 2006-11
                                                                          • Five-year forecast
                                                                            • Figure 18: Gross written domestic property insurance premiums – fan chart, 2007-17
                                                                            • Figure 19: Forecast of gross written premiums – domestic property insurance, 2007-17
                                                                          • Forecast methodology
                                                                            • Fan chart explanation
                                                                            • Market Share

                                                                              • Key points
                                                                                • RBS Group and Lloyds Banking Group a close first and second
                                                                                  • Figure 20: Largest 15 parent groups active in the domestic property market, by GWP, 2011
                                                                                • Strong growth at Ageas Group moves it up in the rankings
                                                                                  • Figure 21: Top eight domestic property insurance parent groups, by GWP, 2009-11
                                                                              • Companies and Products

                                                                                  • Direct Line Group
                                                                                      • Figure 22: Key financial data for RBS Insurance Group, 2010 and 2011
                                                                                      • Figure 23: Key financial data for Direct Line Group, H1 2011 and H1 2012
                                                                                    • Lloyds Banking Group
                                                                                        • Figure 24: Key financial data for Lloyds Banking Group (general insurance), 2010 and 2011
                                                                                        • Figure 25: Key financial data for Lloyds Banking Group (general insurance), H1 2011 and H1 2012
                                                                                      • Aviva
                                                                                          • Figure 26: Key financial data for Aviva (UK general insurance), 2010 and 2011
                                                                                          • Figure 27: Key financial data for Aviva (UK general insurance), H1 2011 and H1 2012
                                                                                        • RSA Insurance
                                                                                            • Figure 28: Key financial data for RSA (UK personal, Household), 2010 and 2011
                                                                                            • Figure 29: Key financial data for RSA (UK personal, household), H1 2011 and H1 2012
                                                                                          • AXA
                                                                                              • Figure 30: Key financial data for AXA (UK and Ireland, Property & Casualty), 2010 and 2011
                                                                                              • Figure 31: Key financial data for AXA (UK and Ireland, Property & Casualty), H1 2011 and H1 2012
                                                                                          • Brand Communication and Promotion

                                                                                            • Key points
                                                                                              • After decline of several years, home insurance adspend creeps up in 2012
                                                                                                • Figure 32: Topline advertising expenditure on home insurance, 2008-12
                                                                                              • Direct mail and TV the key advertising media
                                                                                                • Figure 33: Advertising expenditure on home insurance, by media type, 2010-12
                                                                                              • Direct Line Group companies dominate adspend
                                                                                                • Figure 34: Top 15 advertisers of home insurers, 2010-12
                                                                                            • Brand Research

                                                                                              • Brand map
                                                                                                  • Figure 35: Attitudes towards and usage of brands operating in the home insurance market, August 2012
                                                                                                • Correspondence analysis
                                                                                                  • Brand attitudes
                                                                                                    • Figure 36: Attitudes by brands operating in the home insurance market, August 2012
                                                                                                  • Brand personality
                                                                                                    • Figure 37: Brand personality of brands operating in the home insurance market – macro image, August 2012
                                                                                                    • Figure 38: Brand personality of brands operating in the home insurance market – micro image, August 2012
                                                                                                  • Brand experience
                                                                                                    • Figure 39: Brand usage for brands operating in the home insurance market, August 2012
                                                                                                    • Figure 40: Satisfaction with various brands operating in the home insurance market, August 2012
                                                                                                    • Figure 41: Consideration of brands operating in the home insurance market, August 2012
                                                                                                    • Figure 42: Consumer perceptions of brand performance for brands operating in the home insurance market, August 2012
                                                                                                    • Figure 43: Brand recommendation for brands operating in the home insurance market – Net Promoter Score, August 2012
                                                                                                  • Brand index
                                                                                                    • Figure 44: Brand index for brands operating in the home insurance market, August 2012
                                                                                                    • Figure 45: Brand index vs. recommendation for brands operating in the home insurance market, August 2012
                                                                                                  • Target group analysis
                                                                                                    • Figure 46: Target groups, August 2012
                                                                                                    • Figure 47: Brand usage of brands operating in the home insurance market, by target groups, August 2012
                                                                                                  • Group One – Conformists
                                                                                                    • Group Two – Simply the Best
                                                                                                      • Group Three – Shelf Stalkers
                                                                                                        • Group Four – Habitual Shoppers
                                                                                                          • Group Five – Individualists
                                                                                                          • Channels to Market

                                                                                                            • Key points
                                                                                                              • Internet users more likely to buy via price comparison sites than direct
                                                                                                                • Figure 48: Method of arranging home insurance policies, August 2012
                                                                                                              • Strategy to appearing on web aggregators varies by provider/brand
                                                                                                                • Most policies sold via Independent intermediaries or bancassurance
                                                                                                                  • Figure 49: Domestic property insurance sales (GWP), by distribution channel, 2006-10
                                                                                                              • Home Insurance Ownership

                                                                                                                • Key points
                                                                                                                  • 7 in 10 own a home insurance product
                                                                                                                    • Figure 50: Ownership of home insurance and other types of general insurance, August 2012
                                                                                                                  • Plenty of room to expand contents insurance ownership among renters
                                                                                                                    • Figure 51: Ownership of home ownership and related products, by housing tenure, August 2011
                                                                                                                  • Ownership levels rise sharply after the age of 35
                                                                                                                    • Figure 52: Ownership of home insurance products, by age, August 2012
                                                                                                                  • An opportunity to boost home contents ownership among under-35s
                                                                                                                  • Buying Behaviour

                                                                                                                    • Key points
                                                                                                                      • More than three fifths use price comparison websites to shop around
                                                                                                                        • Figure 53: Channel used when obtaining home insurance quotations, August 2012
                                                                                                                      • Consumers most commonly obtain three to five quotes
                                                                                                                        • Figure 54: Number of quotes obtained when shopping around for a home insurance policy, August 2012
                                                                                                                      • Nearly a quarter of comparison site users obtained more than 10 quotes
                                                                                                                        • Figure 55: Number of quotes obtained when shopping for around for a home insurance policy, by channel used to obtain quotes, August 2012
                                                                                                                      • Use of aggregators does not mean people have stopped buying direct
                                                                                                                        • Figure 56: Method used to arrange home insurance, August 2012
                                                                                                                      • Men and those younger than 54 most likely to use aggregator websites
                                                                                                                        • Figure 57: Channel used when obtaining home insurance quotations, by typical demographic profile of user, August 2012
                                                                                                                    • Policy Renewal and Switching Activity

                                                                                                                      • Key points
                                                                                                                        • Two thirds stayed with existing provider at last renewal
                                                                                                                          • Figure 58: Action taken at last home insurance policy renewal, August 2012
                                                                                                                        • Shopping around does not necessarily increase switching activity
                                                                                                                          • Figure 59: Action taken at last home insurance policy renewal, by number of quotes obtained when shopping for around for a home insurance policy, August 2012
                                                                                                                        • … but premium increases surely do
                                                                                                                          • Over half experienced a premium increase at last renewal…
                                                                                                                            • Figure 60: Price of initial renewal quotation, August 2012
                                                                                                                          • …and over half of those who switched insurer saw an increase
                                                                                                                            • Figure 61: Price of initial renewal quotation by action taken at last home insurance policy renewal, August 2012
                                                                                                                          • Home owners and the affluent more inclined to shop around
                                                                                                                          • Most Valued Home Insurance Policy Features

                                                                                                                            • Key points
                                                                                                                              • Quality of cover the main focal point of consumers
                                                                                                                                • Figure 62: Importance of home insurance product features*, August 2012
                                                                                                                              • Quality and cost of cover take precedence over brand name
                                                                                                                                • Figure 63: Importance of home insurance product features, August 2012
                                                                                                                              • Brands more important to women than men
                                                                                                                                • Two thirds agree cover for items outside the home is important
                                                                                                                                  • Figure 64: Importance of home insurance product features, August 2012
                                                                                                                                • Affluent more likely to be paying attention to what’s covered
                                                                                                                                  • Three in five say online policy management is an essential feature
                                                                                                                                    • Figure 65: Importance of home insurance product features, August 2012
                                                                                                                                  • Interactive technology will help to improve customer satisfaction
                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                      • Figure 66: Best case/worse case forecast of gross written premiums – domestic property insurance, 2012-17
                                                                                                                                  • Appendix – Brand Research

                                                                                                                                      • Figure 67: Brand usage, August 2012
                                                                                                                                      • Figure 68: Brand commitment, August 2012
                                                                                                                                      • Figure 69: Brand momentum, August 2012
                                                                                                                                      • Figure 70: Brand diversity, August 2012
                                                                                                                                      • Figure 71: Brand satisfaction, August 2012
                                                                                                                                      • Figure 72: Brand recommendation, August 2012
                                                                                                                                      • Figure 73: Brand attitude, August 2012
                                                                                                                                      • Figure 74: Brand image – Macro image, August 2012
                                                                                                                                      • Figure 75: Brand image – Micro image, August 2012
                                                                                                                                      • Figure 76: Profile of target groups, by demographics, August 2012
                                                                                                                                      • Figure 77: Psychographic segmentation by target groups, August 2012
                                                                                                                                      • Figure 78: Brand usage, by target groups, August 2012
                                                                                                                                    • Brand index
                                                                                                                                      • Figure 79: Brand index, August 2012
                                                                                                                                  • Appendix – Home Insurance Ownership

                                                                                                                                      • Figure 80: Ownership of home insurance and other types of general insurance, by home insurance ownership, August 2012
                                                                                                                                      • Figure 81: Ownership of home insurance, by demographics, August 2012
                                                                                                                                  • Appendix – Buying Behaviour

                                                                                                                                      • Figure 82: Channels used to obtain home insurance quotations, by demographics, August 2012
                                                                                                                                      • Figure 83: Number of quotes obtained when shopping for around for a home insurance policy, by demographics, August 2012
                                                                                                                                  • Appendix – Policy Renewal and Switching Activity

                                                                                                                                      • Figure 84: Renewal experience, by demographics, August 2012
                                                                                                                                      • Figure 85: Renewal premium experience, by demographics, August 2012
                                                                                                                                  • Appendix – Most Valued Home Insurance Policy Features

                                                                                                                                      • Figure 86: Importance of low price as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 87: Importance of good level of cover as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 88: Importance of well-known brand as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 89: Importance ability to manage policy online as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 90: Importance of items covered under the policy would be replaced based on the cost of an equivalent ‘new’ item as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 91: Importance of no claims discount as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 92: Importance of cover for pedal cycles as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 93: Importance of cover for valuables as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 94: Importance of cover for items outside the home as a home insurance product feature, by demographics, August 2012
                                                                                                                                      • Figure 95: Importance of accidental damage cover as a home insurance product feature, by demographics, August 2012

                                                                                                                                  Companies Covered

                                                                                                                                  • Aviva Plc
                                                                                                                                  • AXA UK plc
                                                                                                                                  • Barclays Bank plc
                                                                                                                                  • ComparetheMarket.com
                                                                                                                                  • Confused.com
                                                                                                                                  • Coutts & Co
                                                                                                                                  • Direct Line Group Limited
                                                                                                                                  • Grupo Santander UK
                                                                                                                                  • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                  • John Lewis Partnership
                                                                                                                                  • Lloyds Banking Group
                                                                                                                                  • Lloyds TSB Insurance
                                                                                                                                  • MoneySupermarket.com Limited
                                                                                                                                  • MORE TH>N
                                                                                                                                  • Nationwide Building Society
                                                                                                                                  • NatWest
                                                                                                                                  • Privilege Insurance
                                                                                                                                  • Royal Bank of Scotland Group plc
                                                                                                                                  • RSA
                                                                                                                                  • Sainsbury's Bank
                                                                                                                                  • Swiftcover
                                                                                                                                  • Yorkshire Bank PLC

                                                                                                                                  Home Insurance - UK - October 2012

                                                                                                                                  £1,995.00 (Excl.Tax)