2022
9
UK Motor Insurance Market Report 2022
2022-04-29T04:04:57+01:00
OX1101859
2195
150880
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Report
en_GB
“Regulatory change marks a new era in the motor insurance market. Pricing and customer retention strategies will evolve throughout 2022 as insurers respond to the changes. Inflation poses a significant…

UK Motor Insurance Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Motor Insurance market report identifies consumer attitudes towards ownership of car insurance, policy renewal behaviour and the impact of regulatory changes. This market report covers the market size, market forecast, market segmentation and industry trends for the Motor Insurance Market in the UK.

Quickly Understand

  • Market size, performance and forecast for the domestic motor insurance market.
  • The impact of inflation and supply chain issues on the motor insurance market.
  • The competitive environment, including regulatory changes and innovation.
  • Ownership of motor insurance and renewal behaviour.
  • Importance of factors when choosing a car insurance policy.
  • Consumer attitudes towards car insurance.

Current Market Landscape

The motor insurance market will be heavily driven by regulatory and economic factors in 2022, particularly with FCA’s new pricing rules, which mark a new era in the motor insurance market. Regulatory intervention and innovation focus on price transparency.

Alongside these changes, inflation and supply change issues in the motor industry will increase the cost base for insurers, resulting in higher premiums and claims costs to rise for consumers. The new regulatory rules challenge insurers to continue to evolve to ensure consumer loyalty and retention.

Market Share and Key Industry Trends

Price comparison sites remain key in this motor insurance market, with shopping around remaining embedded in consumer behaviour, and price remains the key differentiator for consumers choosing their renewable policies.

The motor insurance industry must adapt to the changing market and target the growing number of electric car owners ahead of the 2030 deadline.

Economic pressures on car ownership make affordability among younger consumers less feasible, turning them towards alternatives such as public transport or sharing cars with relatives.

  • 79% of consumers who shopped around when they last arranged/renewed their insurance policy used a price comparison website.
  • 38% of drivers either own or are interested in owning an electric/hybrid car.
  • 52% of under-25s own a car compared to 81% ownership for over-65s.
  • 47% of consumers with car insurance understand how their premiums are calculated.

Future Market Trends in UK Motor Insurance

Our motor insurance market research identifies inflation as the biggest threat to the market. As consumers face higher prices in 2022, it provides a significant opportunity for innovation that focuses on customer experience and product flexibility and fairness, such as tiered levels of cover or introducing telematics and digital solutions to reward better driving behaviour.

Attention will also turn to environmental pressures as the UK moves closer to the 2030 deadline for ending the sale of petrol and diesel vehicles. The motor insurance industry must adapt to changing market and consumer preferences through tailored and flexible products.

Read on to discover more details or take a look at all of our UK Automotive Market Research.

Covered in this Report

Product Types: Motor Insurance, Domestic Motor Insurance, Private Car Insurance.

Brands:  ABI, Direct Line Insurance Group, Admiral Group, Allianz, AVIVA, Hastings Group, Ageas, esure Insurance, AXA, Markerstudy Covea Insurance.

Expert Analysis from a Specialist in the Field

“Regulatory change marks a new era in the motor insurance market. Pricing and customer retention strategies will evolve throughout 2022 as insurers respond to the changes. Inflation poses a significant challenge for the market, causing claims costs and premiums to rise. Innovation demonstrates the opportunities for this market to enhance offerings and focus on evolving consumer needs, including transparency and flexibility.”
Natasha Hayes

Financial Services Analyst, April 2022

 

Table of Contents

  1. Overview

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

    • The five-year outlook for motor insurance market
      • Figure 1: Category outlook, 2022-27
    • The market
    • Market size and forecast
      • Figure 2: Market forecast of gross written personal motor insurance premiums (UK domestic business only), 2016-26
    • Claims levels recover slightly
      • Figure 3: Total number of claims notified and claims frequency, private cars, 2016-21
    • Regulatory and economic factors are critical
    • Companies and brands
    • Allianz enters the top three in 2020
      • Figure 4: Top insurance providers of domestic motor insurance (ABI members), by GWP, 2019 and 2020
    • Challenger insurers continue to evolve
    • Insurers focus on partnerships
    • Motor insurance launches focus on value-enhancing products…
    • …and developing telematics solutions
    • Price comparison sites spend big
    • The consumer
    • 72% of consumers own a car
      • Figure 5: Car ownership, 2022
    • Consumers engage with electric and hybrid cars
      • Figure 6: Ownership and intention to purchase electric or hybrid cars, 2022
    • Three in four have a car insurance policy
      • Figure 7: Motor insurance ownership, 2019-22
    • Consumers continue to shop around
      • Figure 8: Behaviour at car insurance policy renewal, 2022
    • Consumers have different experiences at renewal
      • Figure 9: Price changes at policy renewal, 2022
    • Price comparison sites remain key in this market
      • Figure 10: Sources of information when shopping around or switching providers, 2022
    • Price remains the key differentiator
      • Figure 11: Important car insurance product features, 2022
    • Wider car market challenges impact driver attitudes
      • Figure 12: Attitudes towards car insurance, 2022
    • Over half don’t understand how car insurance price is calculated
  3. Issues and Insights

    • Volatility expected as price uncertainty mounts…
    • …and price transparency will become more important to consumers
    • EVs offer new opportunities for engagement
  4. Market Size and Performance

    • GWP continues to fall
      • Figure 13: Gross written personal motor insurance premiums (UK domestic business only), 2017-21
    • Premium tracker data shows volume stability
      • Figure 14: Number of new policies for domestic (personal) motor insurance, 2012-21
    • Average premiums fall through most of 2021
      • Figure 15: Average premiums for domestic (personal) motor insurance, 2016-21
  5. Market Forecast

    • Premiums expected to increase sharply in 2022
      • Figure 16: Category outlook, 2022-27
    • GWP forecast to grow by 8.4% in 2022
      • Figure 17: Market forecast of gross written personal motor insurance premiums (UK domestic business only), 2016-26
      • Figure 18: Market forecast of gross written personal motor insurance premiums (UK domestic business only), 2016-26
    • Market drivers and assumptions
    • Forecast methodology
  6. Claims and Underwriting Performance

    • Claims levels recovered slightly…
      • Figure 19: Total number of claims notified and claims frequency, private cars, 2016-21
    • …but face considerable uncertainty
      • Figure 20: Average claims costs of settled claims for private car insurance, 2016-21
    • Number of claims notified by claims type
      • Figure 21: Number of claims notified for private cars, by category, 2017-21
    • Motor insurers deliver a strong underwriting result as claims costs fall
      • Figure 22: Underwriting result for domestic motor insurance, 2016-20
  7. Market Drivers

    • Inflation is the key concern for 2022 for consumers, brands and the economy…
    • …and consumer concerns are coming to the fore
      • Figure 23: Consumer concerns about household finances, 2021-22
    • Motor insurance premiums are set to rising cost of living
    • The conflict in Ukraine will hurt the UK economy…
    • …and puts further pressure on the automotive industry
    • The government announces a cut on fuel duty
    • The electric car market grows 76% in 2021…
    • …with infrastructure investment increasing
      • Figure 24: Number of publicly available electric vehicle charging devices at all speeds, 2019-22
    • Road traffic starts to recover from pandemic in 2021
      • Figure 25: Rolling annual total of road traffic in Great Britain, 2019-21
  8. Regulatory and Legislative Changes

    • FCA loyalty pricing reforms take effect
    • …with significant impact on the competitive environment of this market
    • Whiplash reforms come into effect
    • FCA launches new Consumer Duty
    • Product value is a regulatory priority in 2022
  9. Market Share

    • Allianz enters the top three
      • Figure 26: Top insurance providers of domestic motor insurance (ABI members), by GWP, 2019 and 2020
    • Admiral and Direct Line remain market leaders
    • Aviva highlights the challenges COVID-19 has caused
    • Challenger insurers continue to evolve
  10. Competitive Strategies

    • M&A activity results in change in market leaders
    • Direct Line partners with Motability Operations and Tesla
    • Covéa also focuses heavily on partnerships
    • Markerstudy partners with ThingCo
  11. Launch Activity and Innovation

    • VitalityCar is launched
    • AXA launches more affordable motor cover
    • Direct Line launches offers for EV insurance…
    • …and a new self-serve platform
    • Cuvva launches Smart Pricing
    • DriveScore offers opportunities for consumers and insurers
    • Providers focus on environmental innovations
  12. Advertising and Marketing Activity

    • Advertising expenditure on car insurance down by 4% in 2021-22
      • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on car insurance, 2017/18-2021/22
    • Breakdown recovery and van insurance buck the trend
      • Figure 28: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, van insurance and motorcycle insurance, 2017/18-2021/22
    • Price comparison sites spend big to combat regulatory changes
      • Figure 29: Total above-the-line, online display and direct mail advertising expenditure in car insurance, by top 10 advertisers, 2017/18-2021/22
    • Direct Line increased spending by 11%
    • TV advertising continues to be the focus
      • Figure 30: Total above-the-line, online display and direct mail advertising expenditure on car insurance, by media type, 2019/20-2021/22
    • Nielsen Ad Intel coverage
  13. Car Ownership

    • Nearly three in four own a car
      • Figure 31: Car ownership, 2022
    • London living makes owning a car less essential
      • Figure 32: Use of cars among non-car owners, by age, 2022
  14. Electric Car Ownership

    • Over a third are engaged with electric and hybrid cars
      • Figure 33: Ownership and intention to purchase electric or hybrid cars, 2022
    • Infrastructure support could boost interest in EV insurance
      • Figure 34: Electric/hybrid car ownership by area, 2022
  15. Motor Insurance Ownership

    • Three in four have a car insurance policy
      • Figure 35: Motor insurance ownership, 2019-22
    • Telematics solutions could shape the market in the future
  16. Renewal Behaviour

    • It is engrained in consumers to shop around…
      • Figure 36: Behaviour at car insurance policy renewal, 2017-22
    • …especially among those who lack trust in insurers
      • Figure 37: Renewal behaviour by trust in car insurers, 2022
    • Women aged 35-54 most likely to switch provider
      • Figure 38: Renewal behaviour, by gender and age, 2022
  17. Price Changes at Renewal

    • Consumers have different experiences at renewal
      • Figure 39: Price changes at policy renewal, 2022
    • Electric car owners saw more price hikes
      • Figure 40: Car insurance price changes, by type of car owned, 2022
  18. Information Sources when Shopping Around

    • Price comparison sites are the top source of information
      • Figure 41: Sources of information when shopping around or switching providers, 2022
    • New pricing rules mean strategies will adapt
      • Figure 42: Sources of information when shopping around or switching providers, by whether a consumer stayed with the same or switched insurer, 2022
  19. Choosing a Car Insurance Policy

    • Price remains the key differentiator…
    • …but there is scope for a different approach to pricing
      • Figure 43: Important car insurance product features, 2022
    • Reputation most important for loyal policyholders
      • Figure 44: Importance of reputation of and previous experience with provider, by renewal behaviour, 2022
    • Men are more likely to be swayed by technology
  20. Attitudes towards Car Insurance

    • Wider car market challenges impact attitudes towards insurance
      • Figure 45: Attitudes towards car insurance, 2022
    • Almost two thirds of drivers are concerned about the environment
      • Figure 46: Ownership and engagement with electric vehicles, by environmental concerns, 2022
    • Over half don’t understand how car insurance price is calculated
      • Figure 47: Understanding of how car insurance is calculated, by price change at renewal, 2022
  21. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  22. Appendix – Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 48: Market forecast of gross written personal motor insurance premiums (UK domestic business only), including lower and upper bounds, 2021-26
    • Market drivers and assumptions
    • Forecast 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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