UK Consumers and General Insurance 2021

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