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Insurance - Ireland - December 2010

The Irish insurance market is operating in a very different environment compared to that last examined in 2008. The market has had to contend with the challenges of increasing regulation, tightening liquidity, weak consumer confidence and a barrage of natural disasters that have conspired, along with growing trends in fraud, to increase claims and put pressure on profits and consequently on premiums.

The fallout from the financial crisis has created specific challenges for insurers and regulators. Opportunities exist for businesses to respond to changing regulation and build market size.

Demand for insurance has decreased considerably, and the industry must respond to this challenge and clearly communicate the benefits of good quality insurance rather than focusing on cost.

Distribution channels for the insurance market have not changed as much as would be expected in the presence of the new aggregate businesses. However, the industry has become more focused on pricing, providing better value for consumers.

This in turn has made some consumers less loyal, and insurers are now questioning the profitability of their business in such a price-oriented market.

This report examines the various trends that have emerged in the Irish insurance market over the past six years, in particular, general insurance and health insurance.

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Table of contents

  1. Issues in the Market

      • Key themes in the report
        • Definition
          • Motor insurance
            • Home/property insurance
              • Liability insurance
                • Personal accident and travel insurance
                  • Other business
                    • Life assurance/life insurance
                      • Health insurance/private medical insurance
                        • Abbreviations
                        • Future Opportunities

                          • Reducing fraud pays dividends
                            • Loyalty is key for long-term business viability
                            • Market in Brief

                              • The financial crash casts a long shadow
                                • Claims on the up
                                  • Moving towards hard pricing
                                    • Demand decreasing
                                      • Future increases in healthcare required
                                        • Little alternatives but to accept greater risk
                                          • A trend towards market consolidation?
                                            • Rising premiums not quite offsetting weaker demand
                                              • Many routes to market
                                                • Old friends are the best friends
                                                  • Insurance – what’s the point?
                                                    • Other consumers displaying a healthy attitude towards cover
                                                    • Internal Market Environment

                                                      • Key points
                                                        • Liquidity problems
                                                          • Tightening regulation
                                                            • Weakening competition
                                                              • Increasing premiums...
                                                                  • Figure 1: Change in average premiums for motor insurance, UK, 1994-2010
                                                                • ….along with increasing claims
                                                                  • In part, a consequence of fraud
                                                                    • Demand for insurance in decline
                                                                      • Figure 3: Gross written premiums, RoI, 2005-09
                                                                      • Figure 4: Number of visits abroad by Irish residents, RoI, 2002-09
                                                                      • Figure 5: Number of employed and unemployed residents, RoI, 2004-10
                                                                    • The effect of the spending cuts in NI and RoI
                                                                    • Broader Market Environment

                                                                      • Key points
                                                                        • Ireland in dire straits
                                                                          • Figure 6: The Irish economies, NI and RoI, 2010
                                                                        • Motor insurance
                                                                          • Buildings and contents
                                                                            • Liability insurance
                                                                              • Travel insurance
                                                                                • Health insurance
                                                                                  • An ageing population indicates a possible shift in demand for cover
                                                                                    • Figure 7: Population projections, by age group, NI, 2008-51
                                                                                  • Health behaviours
                                                                                    • Record-breaking weather impacting on claims incidences
                                                                                      • Crime
                                                                                        • Car theft
                                                                                          • Burglary
                                                                                          • Competitive Context

                                                                                            • Key points
                                                                                              • Car insurance
                                                                                                • Travel insurance
                                                                                                    • Figure 9: Proportion of incorrect answers for EHIC and travel insurance coverage levels, Q3 2010
                                                                                                  • Buildings and contents insurance
                                                                                                    • Buildings insurance
                                                                                                      • Homeowner with mortgage
                                                                                                        • Landlord insurance
                                                                                                          • Contents insurance
                                                                                                            • Health insurance
                                                                                                              • RoI
                                                                                                                • NI
                                                                                                                • Strengths and Weaknesses

                                                                                                                  • Strengths
                                                                                                                    • Weaknesses
                                                                                                                    • Market Value and Forecast

                                                                                                                      • Key points
                                                                                                                        • The global insurance market cycle
                                                                                                                          • Market value
                                                                                                                            • Figure 12: General insurance* gross written premium segmentation, by sector, RoI, 2009
                                                                                                                          • What’s next for the market?
                                                                                                                            • Claim trends alter market value
                                                                                                                              • Figure 11: Net incurred claims*, NI, RoI and IoI, 2004-14
                                                                                                                          • Who’s Innovating?

                                                                                                                            • Key points
                                                                                                                              • Technology
                                                                                                                                • Decline in price-comparison sites
                                                                                                                                  • Helping with premium costs
                                                                                                                                  • Companies and Products

                                                                                                                                    • Key points
                                                                                                                                      • Figure 12: Insurance providers and cover they provide, NI and RoI, 2010
                                                                                                                                    • Insurance companies
                                                                                                                                      • Admiral Group Plc
                                                                                                                                        • Background and company information
                                                                                                                                          • Products
                                                                                                                                            • Brand positioning
                                                                                                                                              • Allianz Group Plc
                                                                                                                                                • Background and company information
                                                                                                                                                  • Products
                                                                                                                                                    • Brand positioning
                                                                                                                                                      • AXA Insurance Ltd
                                                                                                                                                        • Background and company information
                                                                                                                                                          • Products
                                                                                                                                                            • Brand positioning
                                                                                                                                                              • Aviva plc (formerly Hibernian)
                                                                                                                                                                • Background and company information
                                                                                                                                                                  • Products
                                                                                                                                                                    • Brand positioning
                                                                                                                                                                      • Direct Line Insurance plc
                                                                                                                                                                        • Background and company information
                                                                                                                                                                          • Products
                                                                                                                                                                            • Brand positioning
                                                                                                                                                                              • Open + Direct Insurance
                                                                                                                                                                                • Background and company information
                                                                                                                                                                                  • Products
                                                                                                                                                                                    • Brand positioning
                                                                                                                                                                                      • QUINN Insurance Ltd
                                                                                                                                                                                        • Background and company information
                                                                                                                                                                                          • Products
                                                                                                                                                                                            • Brand positioning
                                                                                                                                                                                              • Zurich Insurance Ireland Ltd
                                                                                                                                                                                                • Background and company information
                                                                                                                                                                                                  • Products
                                                                                                                                                                                                    • Brand positioning
                                                                                                                                                                                                      • Vhi Healthcare (The Voluntary Health Insurance Board)
                                                                                                                                                                                                        • Background and company information
                                                                                                                                                                                                          • Products
                                                                                                                                                                                                            • Brand positioning
                                                                                                                                                                                                              • Online providers
                                                                                                                                                                                                                • Getcover.ie
                                                                                                                                                                                                                  • Background and company information
                                                                                                                                                                                                                    • Products
                                                                                                                                                                                                                      • Brand positioning
                                                                                                                                                                                                                        • Its4women.ie and 25plus.ie
                                                                                                                                                                                                                          • Background and company information
                                                                                                                                                                                                                            • Products
                                                                                                                                                                                                                              • Brand positioning
                                                                                                                                                                                                                                • Retailers
                                                                                                                                                                                                                                  • ASDA
                                                                                                                                                                                                                                    • Background
                                                                                                                                                                                                                                      • Products
                                                                                                                                                                                                                                        • Brand positioning
                                                                                                                                                                                                                                          • Sainsbury’s
                                                                                                                                                                                                                                            • Background and company information
                                                                                                                                                                                                                                              • Products
                                                                                                                                                                                                                                                • Brand positioning
                                                                                                                                                                                                                                                  • Tesco
                                                                                                                                                                                                                                                    • Background and company information
                                                                                                                                                                                                                                                      • Products
                                                                                                                                                                                                                                                        • Brand positioning
                                                                                                                                                                                                                                                          • Banks and building societies
                                                                                                                                                                                                                                                            • Allied Irish Bank (AIB)
                                                                                                                                                                                                                                                              • Background and company information
                                                                                                                                                                                                                                                                • Products
                                                                                                                                                                                                                                                                  • Brand positioning
                                                                                                                                                                                                                                                                    • Bank of Ireland Group
                                                                                                                                                                                                                                                                      • Background and company information
                                                                                                                                                                                                                                                                        • Products
                                                                                                                                                                                                                                                                          • Brand positioning
                                                                                                                                                                                                                                                                            • Halifax (Bank of Scotland plc)
                                                                                                                                                                                                                                                                              • Background and company information
                                                                                                                                                                                                                                                                                • Products
                                                                                                                                                                                                                                                                                  • Brand positioning
                                                                                                                                                                                                                                                                                    • HSBC Bank plc
                                                                                                                                                                                                                                                                                      • Background and company information
                                                                                                                                                                                                                                                                                        • Product information
                                                                                                                                                                                                                                                                                          • Brand positioning
                                                                                                                                                                                                                                                                                            • Irish Nationwide
                                                                                                                                                                                                                                                                                              • Background and company information
                                                                                                                                                                                                                                                                                                • Products
                                                                                                                                                                                                                                                                                                  • Brand positioning
                                                                                                                                                                                                                                                                                                    • Nationwide
                                                                                                                                                                                                                                                                                                      • Background and company information
                                                                                                                                                                                                                                                                                                        • Products
                                                                                                                                                                                                                                                                                                          • Danske Bank (National Irish Bank [NIB] and Northern Bank)
                                                                                                                                                                                                                                                                                                            • Background and company information
                                                                                                                                                                                                                                                                                                              • Products
                                                                                                                                                                                                                                                                                                                • Brand positioning
                                                                                                                                                                                                                                                                                                                  • Permanent TSB
                                                                                                                                                                                                                                                                                                                    • Background and company information
                                                                                                                                                                                                                                                                                                                      • Products
                                                                                                                                                                                                                                                                                                                        • Brand positioning
                                                                                                                                                                                                                                                                                                                          • Progressive Building Society
                                                                                                                                                                                                                                                                                                                            • Background and company information
                                                                                                                                                                                                                                                                                                                              • Products
                                                                                                                                                                                                                                                                                                                                • Brand positioning
                                                                                                                                                                                                                                                                                                                                  • Ulster Bank Group
                                                                                                                                                                                                                                                                                                                                    • Background and company information
                                                                                                                                                                                                                                                                                                                                      • Products
                                                                                                                                                                                                                                                                                                                                        • Aggregate sites
                                                                                                                                                                                                                                                                                                                                          • 123.ie
                                                                                                                                                                                                                                                                                                                                            • Background and company information
                                                                                                                                                                                                                                                                                                                                              • Moneysupermarket.com
                                                                                                                                                                                                                                                                                                                                                • Background and company information
                                                                                                                                                                                                                                                                                                                                                  • Comparethemarket.com
                                                                                                                                                                                                                                                                                                                                                    • Background and company information
                                                                                                                                                                                                                                                                                                                                                      • Confused.com
                                                                                                                                                                                                                                                                                                                                                        • Background and company information
                                                                                                                                                                                                                                                                                                                                                          • Chill.ie
                                                                                                                                                                                                                                                                                                                                                            • Background and company information
                                                                                                                                                                                                                                                                                                                                                              • Other
                                                                                                                                                                                                                                                                                                                                                                • Post Office
                                                                                                                                                                                                                                                                                                                                                                • Channels to Market

                                                                                                                                                                                                                                                                                                                                                                  • Key points
                                                                                                                                                                                                                                                                                                                                                                    • Little business accrued from comparison sites
                                                                                                                                                                                                                                                                                                                                                                      • Figure 13: How motor insurance policy was purchased (main car), NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                      • Figure 16: Method used to purchase motor insurance policy (main car), NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                    • Holidaymakers go direct
                                                                                                                                                                                                                                                                                                                                                                      • Figure 14: Use of travel agent to purchase travel insurance, NI and RoI. 2005-10
                                                                                                                                                                                                                                                                                                                                                                    • The greater the risk, the more likely consumers are to seek out insurers directly
                                                                                                                                                                                                                                                                                                                                                                        • Figure 15: How buildings and contents insurance (from the same provider) was purchased, NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                    • The Consumer – Consumer Ownership

                                                                                                                                                                                                                                                                                                                                                                      • Key points
                                                                                                                                                                                                                                                                                                                                                                        • Comprehensive insurance most prevalent among Irish motorists
                                                                                                                                                                                                                                                                                                                                                                          • Age a key determinant of motor cover
                                                                                                                                                                                                                                                                                                                                                                            • Figure 16: Respondent as the member of the household that decided on motor insurance policy (for main car), by age group, NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                          • RoI consumers batten down the hatches
                                                                                                                                                                                                                                                                                                                                                                            • Travel insurance becoming a must for RoI consumers
                                                                                                                                                                                                                                                                                                                                                                                • Figure 17: Type of holiday and travel insurance held, NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                              • Health insurance could see higher uptake in NI in future
                                                                                                                                                                                                                                                                                                                                                                                • Older consumers more inclined to have health cover in RoI
                                                                                                                                                                                                                                                                                                                                                                                  • Figure 18: Health insurance ownership, by age group, NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                • Consumers opt for full cover
                                                                                                                                                                                                                                                                                                                                                                                  • Figure 19: Type of health insurance held, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                  • Figure 20: Conditions or treatments health insurance policy covers, NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                              • The Consumer – Consumer Loyalty

                                                                                                                                                                                                                                                                                                                                                                                • Key points
                                                                                                                                                                                                                                                                                                                                                                                  • Car insurance
                                                                                                                                                                                                                                                                                                                                                                                    • Figure 21: Length of time respondents have held their motor insurance policy with same provider (main car), NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                    • Figure 22: Proportion of respondents that have held their buildings and contents insurance (from the same provider) policy with the same provider for more than 5 years, NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                • Consumer Target Groups

                                                                                                                                                                                                                                                                                                                                                                                  • Key points
                                                                                                                                                                                                                                                                                                                                                                                    • NI target groups
                                                                                                                                                                                                                                                                                                                                                                                      • Figure 23: Consumer target groups, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                    • Flighty Fledglings
                                                                                                                                                                                                                                                                                                                                                                                      • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                        • Who are Flighty Fledglings?
                                                                                                                                                                                                                                                                                                                                                                                          • Targeting Flighty Fledglings
                                                                                                                                                                                                                                                                                                                                                                                            • Finance Managers
                                                                                                                                                                                                                                                                                                                                                                                              • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                                • Who are Finance Managers?
                                                                                                                                                                                                                                                                                                                                                                                                  • Targeting Finance Managers?
                                                                                                                                                                                                                                                                                                                                                                                                    • Traditional Financers
                                                                                                                                                                                                                                                                                                                                                                                                      • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                                        • Who are Traditional Financers?
                                                                                                                                                                                                                                                                                                                                                                                                          • Targeting Traditional Financers
                                                                                                                                                                                                                                                                                                                                                                                                            • Price-sensitive
                                                                                                                                                                                                                                                                                                                                                                                                              • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                                                • Who are Price-sensitive?
                                                                                                                                                                                                                                                                                                                                                                                                                  • Targeting Price-sensitive
                                                                                                                                                                                                                                                                                                                                                                                                                    • RoI target groups
                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 24: Consumer target groups, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                    • Cash Controllers
                                                                                                                                                                                                                                                                                                                                                                                                                      • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                                                        • Who are Cash Controllers?
                                                                                                                                                                                                                                                                                                                                                                                                                          • Targeting Cash Controllers
                                                                                                                                                                                                                                                                                                                                                                                                                            • Tuned-in Planners
                                                                                                                                                                                                                                                                                                                                                                                                                              • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                                                                • Who are Tuned-in Planners?
                                                                                                                                                                                                                                                                                                                                                                                                                                  • Targeting Tuned-in Planners
                                                                                                                                                                                                                                                                                                                                                                                                                                    • Cautious Financers
                                                                                                                                                                                                                                                                                                                                                                                                                                      • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                                                                        • Who are Cautious Financers?
                                                                                                                                                                                                                                                                                                                                                                                                                                          • Targeting Cautious Financers
                                                                                                                                                                                                                                                                                                                                                                                                                                            • Inexperienced Bankers
                                                                                                                                                                                                                                                                                                                                                                                                                                              • Characteristics
                                                                                                                                                                                                                                                                                                                                                                                                                                                • Who are Inexperienced Bankers?
                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Targeting Inexperienced Bankers
                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Appendix – Channels to Market

                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 25: How motor insurance policy was bought for only car or most recently obtained car, NI and RoI, 2005-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 26: How holiday and travel insurance policy was bought, NI and RoI, 2005-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 27: How holiday and travel insurance policy was arranged, NI and RoI, 2007-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 28: Buildings and contents insurance ownership, NI and RoI, 2007-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 29: Method used to buy buildings and contents insurance (buildings and contents policy from the same provider), NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 30: How buildings and contents insurance was bought (buildings and contents insurance from the same provider), NI and RoI, 2007-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 31: How buildings and contents insurance was bought (buildings and contents insurance from the same provider), NI and RoI, 2007-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 32: How motor insurance policy was purchased (main car), by demographics, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 33: How motor insurance policy was purchased (main car), by demographics, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                    • The Consumer – Consumer Ownership
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 34: Motor insurance ownership (only car or most recently obtained car), by type of policy, NI and RoI, 2005-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 35: Motor insurance ownership (main car), by type of policy, NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 36: Who paid for most recent car insurance policy for only car or most recently obtained car, NI and RoI, 2005-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 37: Health insurance ownership, NI and RoI, 2005-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 38: Holiday and travel insurance ownership, NI and RoI, 2005-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 39: Purpose of holiday and travel insurance, NI and RoI, 2005-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 40: Type of cover of holiday and travel insurance, NI and RoI, 2007-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 41: Health insurance ownership, by demographics, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 42: Health insurance ownership, by demographics, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 43: Holiday and travel insurance ownership, by demographics, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 44: Holiday and travel insurance ownership, by demographics, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 45: Buildings and contents insurance ownership (buildings and contents policy from the same provider), by demographics, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 46: Buildings and contents insurance ownership (buildings and contents policy from the same provider), by demographics, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                    • The Consumer – Consumer Loyalty
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 47: Length of time with provider of buildings and contents insurance (buildings and contents from the same provider), NI and RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 48: Buildings and contents insurance provider changed (buildings and contents policy from the same provider), NI and RoI, 2007-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 49: Respondents that have held their buildings and contents insurance policy (buildings and contents insurance from the same provider) for more than 5 years, by demographics, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 50: Respondents that have held their buildings and contents insurance policy (buildings and contents insurance from the same provider) for more than 5 years, by demographics, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Consumer Target Groups
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 51: Consumer target groups, by agreement with statements relating to finance, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 52: Consumer target groups, by demographics, NI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 53: Consumer target groups, by agreement with statements relating to finance, RoI, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 54: Consumer target groups, by demographics, RoI, 2010

                                                                                                                                                                                                                                                                                                                                                                                                                                                  Companies Covered

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                  Insurance - Ireland - December 2010

                                                                                                                                                                                                                                                                                                                                                                                                                                                  £1,095.00 (Excl.Tax)