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

Motor Insurance - UK - March 2011

The personal motor insurance sector has been subject to considerable change over the last 12 months. After many years of intense competition and downward pressure on premiums, insurers have reacted by raising premium rates across the market.

  • Although shopping around for a better insurance deal is now commonplace, most people don't actually switch providers. Even though more than 70% of car insurance policyholders looked for a better deal at their last policy renewal, well over half of them stuck with their existing insurer.
  • Premium rises have not been universal. Six in ten policyholders saw their premiums increase at their last renewal, but conversely almost four in ten saw little change or even a drop in premiums.
  • Higher premiums do increase the likelihood to switch providers but not all those who switched insurers did so due to increased premiums. A quarter of those who switched at their last renewal had actually received a lower initial renewal quotation.
  • Relatively few policyholders are willing to trade down on the quality of their cover or change their driving behaviour in order to lower their premiums. More than a third state that they would not compromise on quality, even if they have to pay more.
  • People aged 17-24 are the most likely to be able to drive but not have car insurance, a situation which is likely to become worse as young drivers face steep premium rises.
  • Mintel’s consumer research shows that women have a slightly higher propensity to switch providers at renewal. This could have implications for insurers following the ECJ’s recent ruling on gender neutrality.

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
            • Premiums rise but market still delivers an underwriting loss
              • Figure 1: Forecast of motor insurance GWP (personal lines), 2005-15
            • Market factors
              • Premiums increases to combat growing claims costs
                • Figure 2: Total motor insurance market NWP and net claims (personal lines), 2004-09
              • ECJ ruling on gender will have major implications for motor insurers
                • Motoring costs hit the headlines
                  • The number of cars on the road remains flat
                    • Company activity
                      • RBS leads the way…for now
                        • Figure 3: Personal motor underwriter share, by gross written premiums, 2009 (UK insurers only)
                      • Motor insurance adspend declines
                        • Direct Line leads on trust and differentiation
                          • Figure 4: Attitudes towards and usage of motor insurance brands, January 2011
                        • The consumer
                          • Comprehensive cover dominates
                            • More than 70% of policyholders shopped around at renewal
                              • Figure 5: Car insurance renewal behaviour, January 2011
                            • 60% of policyholders have seen their premiums rise
                              • Limited appetite for trading down on cover
                                • What we think
                                • Issues in the Market

                                    • When will the personal motor insurance sector return to underwriting profitability?
                                      • How will the ECJ’s ruling on gender impact the motor insurance market?
                                        • To what extent have consumers noticed the increase in premium rates?
                                          • Are higher premiums leading people to compromise on cover?
                                            • What proportion of people look for a better deal at renewal?
                                            • Future Opportunities

                                                • Confronting a lack of loyalty
                                                  • Can insurers sell telematics as a way of delivering fairness?
                                                  • Internal Market Environment

                                                    • Key points
                                                      • Car insurance premiums soar through 2010
                                                        • Figure 6: AA British Premium Index market average trends, 1994-2010
                                                      • Premium hike attracts attention of policymakers
                                                        • Rising claims undermine profitability…
                                                          • Figure 7: Total motor insurance market NWP and net claims (personal lines), 2004-09
                                                        • ...despite a drop in claims volume
                                                          • Figure 8: Total number of private car insurance claims notified and claims frequency, 2003-10
                                                          • Figure 9: Number of notified motor insurance claims, by type, 2005-09
                                                        • Claims farming activities drive up personal injury claims
                                                          • Figure 10: Average motor claims payment amount, by type, 2005-09
                                                        • Insurers call for implementation of Jackson Review
                                                          • Insurance fraud on the rise
                                                            • Online purchasing contributes to rise in fraud
                                                              • High cost of young driver insurance leads to increase in fronting
                                                                • Uninsured driving claims on a downward trend
                                                                  • Figure 11: Volume of new claims made to MIB, 2004-09
                                                                • Introduction of continuous insurance enforcement scheme
                                                                  • ECJ ruling on gender has major implications
                                                                    • OFT investigation into premium comparisons
                                                                    • Broader Market Environment

                                                                      • Key points
                                                                        • Consumers remain cautious about the economic outlook
                                                                          • Motoring costs rise in 2010
                                                                            • Growth in the UK car parc levels off
                                                                              • Figure 12: UK car parc, 2000-10
                                                                            • Number of GB driving licence holders continues to increase
                                                                              • Figure 13: Full GB driving licence holders, by gender, 1975/76-2009
                                                                            • New car registration figures increase…
                                                                              • Figure 14: New car registrations, by sector, 2002-10
                                                                            • …but private car registrations fall
                                                                              • Number of multi-car households in decline
                                                                                • Figure 15: Number of cars in household, 2006-10
                                                                            • SWOT Analysis

                                                                                • Figure 16: SWOT analysis for personal lines motor insurance, 2011
                                                                            • Who’s Innovating?

                                                                              • Key points
                                                                                • Telematics help to lower insurance costs for young drivers
                                                                                  • Telematics – the future of the market?
                                                                                    • Insurers look to improve anti-fraud measures
                                                                                      • Design your own policy
                                                                                        • Mobile apps to assist the claims process
                                                                                        • Market Size and Forecast

                                                                                          • Key points
                                                                                            • Motor insurers continue to generate an underwriting loss…
                                                                                              • Figure 17: Breakdown of personal motor insurance market, by GWP, NWP, total outgoings and underwriting result, 2005-10
                                                                                            • …but sector expects to deliver an improved performance in 2011
                                                                                              • Forecast
                                                                                                • Figure 18: Forecast of motor insurance GWP (personal lines), 2005-15
                                                                                                • Figure 19: Forecast of motor insurance GWP (personal lines), 2005-15
                                                                                              • Forecast methodology
                                                                                              • Market Share

                                                                                                • Key points
                                                                                                  • RBS Insurance dominates the market…
                                                                                                    • Figure 20: Top 15 personal motor underwriters, by gross written premiums, 2008 and 2009 (UK insurers only)
                                                                                                  • …but only until 2012
                                                                                                    • Rate rises impact underwriter share
                                                                                                      • A note about Admiral and Zurich
                                                                                                        • Notable market developments
                                                                                                        • Companies and Products

                                                                                                          • Admiral Group
                                                                                                              • Figure 21: Admiral Financials, 2008-10
                                                                                                            • Aviva
                                                                                                                • Figure 22: Aviva General Insurance Financials, 2009 and 2010
                                                                                                              • LV=
                                                                                                                  • Figure 23: LV= General Insurance Financials, 2009 and 2010
                                                                                                                • RBS
                                                                                                                    • Figure 24: RBS Insurance Financials, 2009 and 2010
                                                                                                                  • RSA
                                                                                                                      • Figure 25: RSA Financials, 2009 and 2010
                                                                                                                    • Zurich
                                                                                                                    • Channels to Market

                                                                                                                      • Key points
                                                                                                                        • Direct channels and intermediaries account for 80% of motor premiums
                                                                                                                          • Figure 26: Proportional distribution for personal lines motor insurance, by value, 2004-09
                                                                                                                        • Most people would opt to arrange cover online
                                                                                                                          • Figure 27: Preferred channel to arrange car insurance, August 2010
                                                                                                                        • 50% have used price-comparison sites for car insurance arrangements
                                                                                                                          • Figure 28: Proportion of consumers that have purchased car insurance online or used price-comparison site to arrange cover, August 2010
                                                                                                                        • The online advance
                                                                                                                          • Figure 29: Method used to arrange car insurance, 2001-09
                                                                                                                      • Brand Communication and Promotion

                                                                                                                        • Key points
                                                                                                                          • Motor insurance adspend on a downward trend
                                                                                                                            • Figure 30: Annual advertising expenditure on car insurance products, 2006-10
                                                                                                                          • Direct Line continues to lead the way
                                                                                                                            • Figure 31: Top 20 advertisers of car insurance, 2008-10
                                                                                                                          • TV and direct mail are main methods of advertising car insurance
                                                                                                                            • Figure 32: Distribution of total adspend on car insurance products, by media type, 2008-10
                                                                                                                          • Note on adspend data
                                                                                                                          • Brand Research

                                                                                                                            • Brand map
                                                                                                                                • Figure 33: Attitudes towards and usage of motor insurance brands, January 2011
                                                                                                                              • Brand attitudes
                                                                                                                                • Figure 34: Attitudes, by motor insurance brand, January 2011
                                                                                                                              • Brand personality
                                                                                                                                • Figure 35: Motor insurance brand personality – macro image, January 2011
                                                                                                                              • Brand personality
                                                                                                                                • Figure 36: Motor insurance brand personality – micro image, January 2011
                                                                                                                              • Correspondence analysis
                                                                                                                                • Brand experience
                                                                                                                                  • Figure 37: Motor insurance brand usage, January 2011
                                                                                                                                  • Figure 38: Satisfaction with various motor insurance brands, January 2011
                                                                                                                                  • Figure 39: Consideration of motor insurance brands, January 2011
                                                                                                                                  • Figure 40: Consumer perceptions of current motor insurance brand performance, January 2011
                                                                                                                                  • Figure 41: Motor insurance brand recommendation – Net Promoter Score, January 2011
                                                                                                                                  • Figure 42: Motor insurance brand index, January 2011
                                                                                                                                  • Figure 43: Motor insurance brand index vs. recommendation, January 2011
                                                                                                                                  • Figure 44: Target groups, January 2011
                                                                                                                                  • Figure 45: Motor insurance brand usage, by target groups, January 2011
                                                                                                                              • Motor Insurance Ownership

                                                                                                                                • Key points
                                                                                                                                  • A note about Mintel’s consumer research
                                                                                                                                    • Legal requirement means car insurance is widely held
                                                                                                                                      • Figure 46: Ownership of car insurance, by type, January 2011
                                                                                                                                    • Comprehensive cover dominates market
                                                                                                                                      • Figure 47: Proportional split of comprehensive and third party cover among motor insurance policyholders, January 2011
                                                                                                                                    • Car insurance ownership on an upward trend
                                                                                                                                      • Figure 48: Trends in car insurance ownership, 2004-11
                                                                                                                                    • Two thirds of 17-24-year-olds do not have car insurance
                                                                                                                                      • Figure 49: People without car insurance, by age, January 2011
                                                                                                                                    • Potential for growth among over-70s
                                                                                                                                      • Car insurance ownership peaks among 35-64-year-olds
                                                                                                                                        • Figure 50: Ownership of car insurance, by age, January 2011
                                                                                                                                      • Only 50% of women are main policyholders
                                                                                                                                        • Figure 51: Ownership of car insurance, by gender, January 2011
                                                                                                                                    • Renewal Behaviour

                                                                                                                                      • Key points
                                                                                                                                        • 30% of policyholders switched providers at last renewal
                                                                                                                                          • Figure 52: Car insurance renewal behaviour, January 2011
                                                                                                                                        • Unconscious switchers
                                                                                                                                          • Third party policyholders switch to drive down costs
                                                                                                                                            • Figure 53: Car insurance renewal behaviour, by ownership of car insurance, January 2011
                                                                                                                                          • Women are more likely than men to switch providers
                                                                                                                                            • Figure 54: Car insurance renewal behaviour, by gender, January 2011
                                                                                                                                          • Switching activity reduces with age...
                                                                                                                                            • Figure 55: Car insurance renewal behaviour, by age, January 2011
                                                                                                                                          • ...but shoparound activity spikes when people reach 65-74
                                                                                                                                          • Renewal Premium Experience

                                                                                                                                            • Key points
                                                                                                                                              • Six out of ten policyholders saw their renewal premiums increase
                                                                                                                                                • Figure 56: Renewal premium experience, January 2011
                                                                                                                                              • Nearly two thirds of switchers saw their renewal premiums rise
                                                                                                                                                • Figure 57: Renewal premium experience, by car insurance renewal behaviour, January 2011
                                                                                                                                              • Enough difference to switch?
                                                                                                                                                • A quarter of switchers actually saw a fall in premiums
                                                                                                                                                  • Younger adults are more likely to see premiums fall
                                                                                                                                                    • Figure 58: Renewal premium experience, by age, January 2011
                                                                                                                                                  • ABC1s are more likely to perceive premium increases
                                                                                                                                                    • Figure 59: Renewal premium experience, by socio-economic group, January 2011
                                                                                                                                                • Consumer Approach Towards Rising Premiums

                                                                                                                                                  • Key points
                                                                                                                                                    • A quarter would opt to increase their excess to combat a major rate hike...
                                                                                                                                                        • Figure 60: Approaches taken to reduce car insurance premiums, January 2011
                                                                                                                                                      • ...but 35% are not prepared to compromise on the quality of cover
                                                                                                                                                        • Loyal policyholders are the least likely to compromise on cover
                                                                                                                                                          • Figure 61: Approaches taken to reduce car insurance premiums, by car insurance renewal behaviour, January 2011
                                                                                                                                                        • The reality of a premium hike may alter policyholder views
                                                                                                                                                          • Figure 62: Approaches taken to reduce car insurance premiums, by renewal premium experience, January 2011
                                                                                                                                                        • Demographic drivers of attitude
                                                                                                                                                          • Figure 63: Approaches taken to reduce car insurance premiums, key demographics, January 2011
                                                                                                                                                        • Third party policyholders are less likely to have scope to change excess
                                                                                                                                                          • Figure 64: Approaches taken to reduce car insurance premiums, by ownership of car insurance, January 2011
                                                                                                                                                      • Appendix - Market Definitions

                                                                                                                                                        • Appendix – Market Forecast

                                                                                                                                                            • Figure 65: Best and worst case forecast for motor insurance GWPs, 2010-15
                                                                                                                                                        • Appendix – Motor Insurance Ownership

                                                                                                                                                            • Figure 66: Ownership of car insurance, by demographics, January 2011
                                                                                                                                                        • Appendix – Renewal Behaviour

                                                                                                                                                            • Figure 67: Motor insurance renewal behaviour, by demographics, January 2011
                                                                                                                                                        • Appendix – Renewal Premium Experience

                                                                                                                                                            • Figure 68: Renewal premium experience, by demographics, January 2011
                                                                                                                                                        • Appendix – Consumer Approach Towards Rising Premiums

                                                                                                                                                            • Figure 69: Approaches taken to reduce car insurance premiums, by demographics, January 2011
                                                                                                                                                            • Figure 70: Approaches taken to reduce car insurance premiums, by demographics, January 2011

                                                                                                                                                        Companies Covered

                                                                                                                                                        • Asda Group Ltd
                                                                                                                                                        • Association of British Insurers
                                                                                                                                                        • Aviva Plc
                                                                                                                                                        • Bank of England
                                                                                                                                                        • BGL Group
                                                                                                                                                        • Co-operative Group
                                                                                                                                                        • ComparetheMarket.com
                                                                                                                                                        • Direct Line Group Limited
                                                                                                                                                        • Driver and Vehicle Licensing Agency
                                                                                                                                                        • Driving Standards Agency
                                                                                                                                                        • Financial Services Authority (The)
                                                                                                                                                        • Gfk NOP
                                                                                                                                                        • GoCompare
                                                                                                                                                        • Groupama Insurances
                                                                                                                                                        • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                                        • Highway Insurance Holdings Plc
                                                                                                                                                        • Insurance Fraud Bureau
                                                                                                                                                        • J. Sainsbury
                                                                                                                                                        • John Gilbert Financial Research
                                                                                                                                                        • Kantar Media
                                                                                                                                                        • Liverpool Victoria Friendly Society Limited
                                                                                                                                                        • Lloyds Banking Group
                                                                                                                                                        • Marks & Spencer
                                                                                                                                                        • MoneySupermarket.com Limited
                                                                                                                                                        • NatWest
                                                                                                                                                        • Office of Fair Trading
                                                                                                                                                        • Royal Bank of Scotland Group plc
                                                                                                                                                        • Saga Services (finance)
                                                                                                                                                        • Sheilas' Wheels
                                                                                                                                                        • Society of Motor Manufacturers and Traders
                                                                                                                                                        • Tesco Plc
                                                                                                                                                        • Waitrose
                                                                                                                                                        • Wm Morrison Supermarkets
                                                                                                                                                        • Zurich Financial Services

                                                                                                                                                        Motor Insurance - UK - March 2011

                                                                                                                                                        £1,995.00 (Excl.Tax)