2021
9
UK Consumers and General Insurance Market Report 2021
2022-02-05T03:02:44+00:00
OX1049067
2195
147716
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Report
en_GB
“The general insurance market is currently undergoing major regulatory enforced change with insurers in core markets, such as motor and home insurance, no longer able to charge existing customers more…

UK Consumers and General Insurance Market Report 2021

£ 2,195 (Excl.Tax)

Description

The UK Consumers and General Insurance report identifies consumer attitudes towards consumers and medical insurance, key regulatory changes, and different insurance products in the UK. The UK Consumers and General Insurance report covers the market size, market forecast, market segmentation and industry trends for the Consumers and Health Insurance market in the UK. 

Current Market Landscape

From January 2022, new FCA pricing regulation will prevent insurers in core general insurance markets from charging renewing customers more than new customers for covering the same risk. However, while this change should help to improve trust in the longer term, we are unlikely to see much of an impact in consumer behaviour in the short term.

  • 63% of policyholders agree that you only get the best deals by switching providers regularly – suggesting that most will continue to shop around.
  • 82% of consumers with insurance have not made a claim in the last two years.
  • 65% of those who made a claim in the last two years had their claim paid out in full, with an additional 20% having their claim paid, but not in full.

Demand for insurance has broadly held up during the pandemic, with many insurance companies benefiting from positive underwriting results in personal lines. This was largely driven by a drop in claims in the motor sector, which made up for lower underwriting performance in home insurance and other sectors.

Future Market Trends in Consumers and General Insurance 

Over the next year inflation will push up the cost of claims, and as a result, premiums across personal lines business. Household budgets will be increasingly squeezed, with a growing number of consumers forced to look for ways to cut back on costs in order to make ends meet. Insurers can expect to see policyholders trading down and weighing up the benefits of some types of discretionary cover, although few are likely to cancel existing cover.

The new FCA pricing regulation brings welcome change for loyal customers, and offers the opportunity for insurers to focus on brand building and rewarding existing customers. Insurers have an opportunity to move towards developing longer-term and more valuable relationships with consumers rather than engaging in the race to the bottom for new consumers. This could bring in a new era of innovation and new technology within the sector.

Read on to discover more details or take a look at all of our UK Finance market research.

Quickly understand

  • The impact of COVID-19 on the general insurance market, including consumer attitudes towards the sector’s handling of the crisis.
  • The key regulatory changes in the general insurance market.
  • The economic and societal factors affecting the general insurance market.
  • Ownership of different insurance products, including niche product ownership.
  • Experiences of making claims and trust in insurers.
  • Factors and attitudes influencing the choice of provider and renewing insurance.

Covered in this report

Brands: Direct Line, Aviva, Churchill, Admiral, Saga, LV=, AXA, More Th>n, esure.

Expert analysis from a specialist in the field

This report, written by Jennie Bryans, a leading analyst in the Financial sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The general insurance market is currently undergoing major regulatory enforced change with insurers in core markets, such as motor and home insurance, no longer able to charge existing customers more than they would new customers. This is expected to force many more insurers to focus more on customer retention and loyalty, rather than compete in a race to the bottom in terms of price. This will be a crucial year for insurers to work on building good relationships and developing trust with consumers, while pricing is expected to be volatile until the changes from the new FCA regulation stabilise.

Jennie Bryans
Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on the general insurance market
      • Figure 1: Short, medium and long-term impact of COVID-19 on general insurance, 2021
    • The market
    • GWP is expected to have dropped slightly in 2021
      • Figure 2: General insurance – retail products – UK risks, by gross written premiums, 2017-21
    • Motor insurance GWP declines in 2021, while home insurance remains flat
      • Figure 3: Gross written premiums for general insurance, by insurance type, 2017-21
    • FCA loyalty pricing reforms take effect
    • Financial confidence has fallen as concerns about rising prices started to mount
    • Companies and brands
    • Companies focusing on digital strategies to stand out from the crowd
    • Aviva strengthens digital platforms…
    • …Direct Line launches a self-serve platform for motor customers…
    • …and AXA joins forces with Microsoft to launch digital healthcare platform
    • Insurers focus on brand awareness campaigns as customer retention
    • Limited brand differentiation and scope to improve trust
      • Figure 4: Attitudes towards and usage of selected brands operating in the general insurance market, 2021
    • The consumer
    • Insurance ownership remains flat in 2021
      • Figure 5: Types of insurance owned, 2020 and 2021
    • Affluent households are more likely to have niche insurance cover
      • Figure 6: Niche insurance product ownership, 2021
    • Most insurance holders have not made a claim in the last two years
      • Figure 7: Claims experience in the last 2 years, 2021
    • Transparent pricing is most important factor for customers
      • Figure 8: Factors influencing insurance provider choice, 2021
    • Brand building and loyalty will move to the fore…
    • …along with a focus on good quality insurance
      • Figure 9: Attitudes towards arranging and renewing insurance cover, 2021
    • Majority of consumers trust insurers to keep personal data secure…
    • …but trust declines over treatment of customers
      • Figure 10: Trust in general insurers, 2021
  3. Issues and Insights

    • FCA pricing regulation set to change dynamics of the market…
    • …but only over the longer term
    • Inflationary pressures will increase policyholder scrutiny of the value of cover
  4. Market Size

    • Impact of COVID-19 on the general insurance market
      • Figure 11: Short, medium and long-term impact of COVID-19 on general insurance, 2021
    • GWP expected to drop slightly in 2021
      • Figure 12: General insurance – retail products – UK risks, by gross written premiums, 2017-21
  5. Market Segmentation

    • Motor insurance GWP declines in 2021, while home insurance remains flat
    • Health insurance sees a pandemic-related boost in GWP
      • Figure 13: Gross written premiums for general insurance, by insurance type, 2017-21
    • A mixed bag for claims ratio and underwriting result
      • Figure 14: Claims ratio, 2016-20
      • Figure 15: Underwriting result, 2016-20
  6. Market Drivers

    • GDP reached pre-pandemic levels in November 2021…
    • …but the post-COVID bounce-back will be followed by a period of slower growth
    • Employment has held up better than expected
    • Inflationary pressures are mounting
    • Financial confidence fell sharply in October 2021…
      • Figure 16: Financial confidence index, 2019-21
    • …as concerns about rising prices started to mount
      • Figure 17: Consumer concerns over cost-of-living changes, October-December 2021
    • COVID-19 continues to cause disruption for society
    • Consumers are wary of insurers following the pandemic
      • Figure 18: Consumer perceptions of how well different types of company have supported customers during the COVID-19 pandemic, 2021
  7. Regulatory and Legislative Changes

    • FCA loyalty pricing reforms take effect
    • FCA launches new Consumer Duty to bolster consumer protection
    • FCA keeping an eye on digital financial services competition
  8. Competitive Strategies and Launch Activity

    • Companies focusing on digital strategies to stand out from the crowd
    • Aviva strengthens digital platforms…
    • … Direct Line launches a self-serve platform for motor customers…
    • …and AXA joins forces with Microsoft to launch digital healthcare platform
    • Focus on ESG strategies ramps up
    • Merger and acquisition update
  9. Advertising and Marketing Activity

    • GI adspend increases sharply in 2020/21
      • Figure 19: Total above-the-line, online display and direct mail advertising expenditure on general insurance, 2016/17-2020/21
    • Car insurance dominates GI adspend
      • Figure 20: Total above-the-line, online display and direct mail advertising expenditure on general insurance, by media type, 2019/20 and 2020/21
    • Direct Line was the biggest advertiser in 2020/21…
    • …while PCWs remain competitive
      • Figure 21: Leading spenders on above-the-line, online display and direct mail advertising expenditure on general insurance, 2019/20 and 2020/21
    • Insurers are focusing on brand awareness campaigns
    • Nielsen Ad Intel coverage
  10. Brand Research

    • Brand map
    • Limited brand differentiation and scope to improve trust
      • Figure 22: Attitudes towards and usage of selected brands operating in the general insurance market, 2021
    • Key brand metrics
      • Figure 23: Key metrics for selected brands, 2021
    • Brand attitudes: Direct Line is perceived as offering great customer service
      • Figure 24: Attitudes, by brand, 2021
    • Brand personality: Saga is seen as exclusive
      • Figure 25: Brand personality – macro image, 2021
    • Brand personality: AXA is perceived to be authoritative
      • Figure 26: Brand personality – micro image, 2021
    • Brand analysis
    • Aviva is deemed as trustworthy
    • Direct Line and Churchill have high levels of usage
    • Admiral, AXA and LV= are perceived as accessible
    • Saga is deemed to be exclusive and unique
    • MORE TH>N and esure lack differentiation
  11. General Insurance Product Ownership

    • Insurance ownership remains flat in 2021
      • Figure 27: Types of insurance owned, 2020 and 2021
    • Technology insurance provides a useful gateway to home insurance cover
    • Scope to expand multi-cover options and services
      • Figure 28: Repertoire analysis of insurance product ownership, by age, 2021
  12. Niche Product Ownership

    • Men dominate ownership of niche insurance products
    • Niche insurance policyholders are price-sensitive and demand value
      • Figure 29: Niche insurance product ownership, 2021
    • Higher-income households show good potential for multi-cover policies
      • Figure 30: Combined repertoire analysis of types of insurance and niche insurance held, by household income, 2021
  13. Claims Experience

    • Most insurance holders have not made a claim in the last two years
    • Claimants tend to be more trusting, but have heightened price-sensitivity
      • Figure 31: Claims experience in the last 2 years, 2021
    • Majority of claims made were paid in full…
      • Figure 32: Outcome of insurance claim, 2021
    • …with over half of those with a finalised claim were satisfied with claims experience
      • Figure 33: Satisfaction of claims experience, 2021
  14. Factors Influencing Provider Choice

    • Transparent pricing is most important factor for consumers
    • Online reviews and sustainable credentials are more important factors for younger people
      • Figure 34: Factors influencing insurance provider choice, 2021
    • Those with claims experience prioritise a quick claims process
      • Figure 35: Factors influencing provider choice, by claims experience in the last two years, 2021
  15. Attitudes towards Arranging and Renewing Insurance

    • Brand building and loyalty will move to the fore…
    • …along with a focus on good quality insurance
      • Figure 36: Attitudes towards arranging and renewing insurance cover, 2021
    • Older Millennials are more likely to regard a lot of insurance as a rip-off
      • Figure 37: Agreement with statement ‘A lot of insurance is a rip-off’, by generation, 2021
  16. Trust in General Insurance

    • Majority of consumers trust insurers to keep personal data secure…
    • …but trust declines over treatment of customers
      • Figure 38: Trust in general insurers, 2021
    • Younger consumers are more trusting of insurers
      • Figure 39: Trust in insurers to pay out fairly on claims, by age, 2021
  17. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted. Our reports are available to download in PDF and PPT formats.

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