2023
9
UK Consumers and General Insurance Market Report 2023
2023-01-19T03:02:17+00:00
OX1154775
2195
159670
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Report
en_GB
“The general insurance market faces a challenging year in 2023 as inflation continues to grip the UK economy and consumers continue to face a squeeze on household finances. While the…

UK Consumers and General Insurance Market Report 2023

£ 2,195 (Excl.Tax)

Description

“The general insurance market faces a challenging year in 2023 as inflation continues to grip the UK economy and consumers continue to face a squeeze on household finances. While the essential nature of insurance means that cover cancellation is likely a last resort, consumers will look for ways to lower their cost of insurance or seek additional value from their policy.”
Natasha Hayes, Senior Financial Services Analyst, January 2023

This Report looks at the following areas:

  • Market size and performance for the general insurance market.
  • Regulatory and legislative changes in the market.
  • Recent brand activity, including launch activity, competitive strategies and advertising.
  • Ownership and channels to purchase general insurance products.
  • Policy management, both for straightforward changes and for claims.
  • Attitudes towards general insurance, including purchasing.

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for general insurance
      • Figure 1: Category outlook, 2023-27
    • The market
    • Domestic general insurance estimated to have grown in 2022
      • Figure 2: Gross written premiums for general insurance (personal lines), 2016-22
    • Motor insurance dominates the domestic general insurance market
      • Figure 3: Market segmentation for general insurance (personal lines), by gross written premium, 2016-21
    • Quarterly sales data shows more customers renewing in 2022
    • Direct channels dominate distribution
      • Figure 4: Channels to market for general insurance (personal lines), by gross written premiums, 2021
    • Insurance markets are rocked by claims inflation
    • GIPP rules came into effect at the start of 2022
    • Companies and brands
    • Tiered and low-cost cover options filter into the market
    • Amazon opens new insurance store
    • Lemonade enters UK market in partnership with Aviva
    • Other insurance launches aim to offer consumers additional choice
    • Advertising spend returns to pre-pandemic levels
      • Figure 5: Total above-the line, online display and direct mail advertising expenditure on general insurance, 2017/18-2021/22
    • The consumer
    • Majority of consumers own some kind of insurance
      • Figure 6: Insurance product ownership, 2021-22
    • PCWs are most popular channel to market
      • Figure 7: Method of arranging last general insurance policy, 2022
    • Market competitiveness means consumers use multiple insurers
      • Figure 8: Use of single or multiple insurance providers, 2022
    • Communication preferences depend on nature of interaction
      • Figure 9: Policy management preferences, 2022
    • Gen Z and Millennials are most likely to use apps to manage policies
    • Consumers try to balance price with level of cover at renewal
      • Figure 10: Important factors when renewing an insurance policy, 2022
    • Consumers are willing to buy insurance from tech firms
      • Figure 11: Attitudes towards purchasing general insurance products, 2022
    • Hassle of switching offers opportunities to promote retention
    • Consumers need reasons to engage with insurers
      • Figure 12: Attitudes towards general insurance, 2022
  3. Issues and Insights

    • Despite price rises, insurance remains an essential purchase
    • Shopping around is an engrained consumer behaviour
    • Opportunity for insurance apps to boost engagement
  4. Market Size and Performance

    • Despite economic decline, the general insurance market will be resilient
      • Figure 13: Category outlook, 2023-27
    • Domestic general insurance estimated to have grown in 2022
      • Figure 14: Gross written premiums for general insurance (personal lines), 2016-22
    • Learnings from the last income squeeze
  5. Market Segmentation

    • Motor insurance dominates the domestic general insurance market…
      • Figure 15: Market segmentation for general insurance (personal lines), by gross written premium, 2016-21
    • Quarterly sales data shows more motor customers renewing in 2022
      • Figure 16: Motor premium tracker – Number of policies sold, by type of customer, 2022
    • Nearly 80% of property insurance sales are renewed policies
      • Figure 17: Domestic property premium tracker – Number of policies sold, by type of customer, 2022
    • Other lines of insurance have experienced growth, but below the rate of inflation
    • Demand for health insurance boosted by NHS backlog
    • Premiums continue to rise for pet insurance
  6. Channels to Market

    • Direct channels dominate distribution
      • Figure 18: Channels to market for general insurance (personal lines), by gross written premiums, 2021
    • Price comparison sites also play an important role
      • Figure 19: Financial services products researched using a price comparison site, 2022
  7. Market Drivers

    • Inflation is the key concern for consumers and brands…
    • …and a rise in energy prices leads to fall in financial wellbeing…
      • Figure 20: Household financial wellbeing index, 2016-22
    • …and confidence
      • Figure 21: Household financial confidence index, 2016-22
    • Insurance markets are rocked by claims inflation
      • Figure 22: Total value of claims incurred for general insurance (personal lines), 2016-22
    • Market factors will also impact specific insurance markets
    • NHS waiting list boosts interest in health insurance
    • The conflict in Ukraine puts pressure on the automotive industry
    • Property transactions down 3% in October 2022
    • Growth in pet ownership plateaued in 2022
  8. Regulatory and Legislative Changes

    • GIPP rules came into effect at the start of 2022
    • FCA introduces new consumer duty rules
    • Final policy statement on Solvency II reforms published
  9. Competitive Strategies

    • Aviva invests to help with crisis support
    • Providers offer tiered cover to increase options for customers
    • L&G partners with RedSTART to provide financial education
    • LV= GI partners with Bristol University
  10. Launch Activity and Innovation

    • Amazon opens new insurance store
    • Lemonade enters UK market in partnership with Aviva
    • Insurtech Urban Jungle moves into car insurance space
    • Revolut launches pet insurance product
    • BGL and Covea launch Millennial motor product
    • Aviva launches Aviva Zero for the environmentally conscious…
    • …as well as its lowest cost car insurance product
  11. Advertising and Marketing Activity

    • Advertising spend returns to pre-pandemic levels
      • Figure 23: Total above-the line, online display and direct mail advertising expenditure on general insurance, 2017/18-2021/22
    • Above-the-line spend is dominated by car insurance
      • Figure 24: Above-the line, online display and direct mail advertising expenditure on general insurance, by insurance category, 2021/22
    • Direct Line launches Marvel TV campaign
      • Figure 25: Total above-the line, online display and direct mail advertising expenditure on general insurance, by advertiser, 2017/18-2021/22
    • Price comparison sites focus on general insurance advertising
    • Nielsen Ad Intel coverage
  12. General Insurance Product Ownership

    • Nine of out ten have some kind of insurance
      • Figure 26: Insurance product ownership, 2021-22
    • One in four owns three types of insurance
      • Figure 27: Insurance product ownership – Repertoire analysis, 2022
    • Flexible policies could boost insurance uptake among lower earners
      • Figure 28: Insurance product ownership – Repertoire analysis, by household income, 2022
  13. Channels to Purchase Insurance

    • Pricing regulation is yet to dent confidence in PCWs
      • Figure 29: Method of arranging last general insurance policy, 2022
    • Under-35s are turning to insurance apps…
    • …but telephone options should not be overlooked
    • Market competitiveness means consumers use multiple insurers
      • Figure 30: Use of single or multiple insurance providers, 2022
    • Over-55s most likely to take out cover with different providers
      • Figure 31: Use of single or multiple insurance providers, by age, 2022
  14. Insurance Policy Management

    • Communication preferences depend on nature of interaction
      • Figure 32: Policy management preferences, 2022
    • Gen Z and Millennials are most likely to use apps to manage policies
      • Figure 33: Preference towards apps for making straightforward changes to an insurance policy, by generation, 2022
    • Claims process must focus on customer service
  15. Priorities at Renewal

    • Consumers try to balance price with level of cover at renewal
      • Figure 34: Important factors when renewing an insurance policy, 2022
    • Retention will be a challenge in the current economic environment
    • Sustainability credentials are important for a minority
  16. Attitudes towards General Insurance

    • Consumers are willing to buy insurance from tech firms
      • Figure 35: attitudes towards purchasing general insurance products, 2022
    • Hassle of switching offers opportunities to promote retention
      • Figure 36: Attitudes towards switching insurance provider at renewal, by age, 2022
    • Consumers need reasons to engage with insurers
      • Figure 37: Attitudes towards general insurance, 2022
    • Male Gen Zs are most likely to reduce insurance spend due to cost of living
      • Figure 38: Consumers and general insurance – CHAID – Tree output, 2022
  17. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
    • CHAID analysis methodology
      • Figure 39: Consumers and general insurance – CHAID – Table output, October 2022

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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