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UK Consumers and General Insurance market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Consumers and General Insurance market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Products covered in this Report

This Report is a consumer research focused overview of the UK personal lines general insurance market.

General insurance is insurance that covers (non-life) risks for a limited period, typically one year.

The main sectors within the personal lines market are:

Motor – Motor policies cover the legal liabilities arising from the use of a motor vehicle, such as a private car or motorcycle. Comprehensive policies additionally cover damage to the vehicle (see Motor Insurance – UK, March 2017 for more information).

Household – Household policies cover specified property that may be damaged or destroyed by events or perils such as fire, storm, subsidence or theft (see Home Insurance –UK, December 2017 for more information).

Accident and health – Comprises two main types of business: personal accident and medical expenses. Personal accident policies will pay a lump sum or weekly benefits in the event of accidental death or a specified injury. Private medical insurance (PMI) will pay the costs of medical treatment for acute conditions (see Private Medical Insurance – UK, October 2017 for more information).

Miscellaneous and pecuniary loss – Relates to financial losses that may have occurred, includes travel insurance (Travel Insurance – UK, February 2017), pet insurance (Pet Insurance – UK, August 2017), legal expenses, etc.

Definitions

Gross written premium (GWP) – Premium income accepted during the year, which is quoted gross of reinsurance ceded, but net of reinsurance accepted.

Net written premium (NWP) – Premium income net of reinsurance ceded but gross of commission, and excluding Insurance Premium Tax.

Expert analysis from a specialist in the field

Written by Paul Davies, a leading analyst in the UK sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Consumers are still extremely price sensitive when it comes to selecting a general insurance provider, as many see no reason to automatically renew with their existing insurer/s. However, the rollout of more loyalty schemes may help brands to improve retention and gain a valuable and regular touchpoint with Millennials in particular. Paul Davies
Head of Leisure, Foodservice, Travel & B2B research

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
        • Definitions
        • Executive Summary

            • The market
              • Value of general insurance premiums rose by £600 million in 2016
                • Figure 1: General insurance revenue – retail products – UK risks, by gross written premiums, 2012-16
              • Motor insurance premiums account for 40% of incomings…
                • Figure 2: Share of premium income, by category, UK general insurance retail products, by gross written premiums, 2016
              • Companies and brands
                • Motor insurance accounts for over a third of total adspend
                  • Figure 3: Total above-the-line, online display and direct mail advertising expenditure on general insurance, 2012/13-2016/17*
                • The consumer
                  • Motor and home policies sit at the core of general insurance
                    • Figure 4: Insurance product ownership, September 2017
                  • Consumers show little loyalty towards general insurers
                    • Figure 5: Switching activity in general insurance markets, September 2017
                  • The importance of multichannel communication is clear
                    • Figure 6: Channel preferences in general insurance, September 2017
                  • Price guarantees most likely to improve retention
                    • Figure 7: Things that would encourage consumers to renew policies with their existing insurers, September 2017
                  • Consumers want more ways to customise policies
                    • Figure 8: Interest in new features, September 2017
                  • Insurers can utilise Open Banking to improve engagement
                    • Figure 9: Interest in sharing financial data with different providers, September 2017
                  • What we think
                  • Issues and Insights

                    • Flexible policies can help to address the insurance gap
                      • The facts
                        • The implications
                          • The loyalty exchange
                            • The facts
                              • The implications
                                • PFMs could manage consumers’ insurance needs
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Value of general insurance premiums rose by £600 million in 2016
                                        • Motor insurance premiums account for 40% of incomings
                                          • Improving transparency at renewal
                                            • Open Banking gives insurers the opportunity to get personal
                                            • Market Size

                                              • Value of general insurance premiums rose by £600 million in 2016
                                                  • Figure 10: General insurance revenue – retail products – UK risks, by gross written premiums, 2012-16
                                                • Drop in claims helps insurers to boost underwriting profits
                                                  • Figure 11: General insurance – retail products – UK outgo and underwriting result, 2012-16
                                              • Market Segmentation

                                                • Motor insurance premiums account for 40% of incomings…
                                                  • Figure 12: Share of premium income, by category, UK general insurance retail products, by gross written premiums, 2016
                                                • … but cost pressures and claim costs lead to motor underwriting losses
                                                  • Figure 13: Underwriting result – UK general insurance retail products, 2012-16
                                                • The calm after the storm
                                                  • Figure 14: Claims ratio – UK general insurance retail products, 2012-16
                                              • Market Environment

                                                • Solvency II forces insurers to boost reserves
                                                  • GDPR underpins the need for transparency
                                                    • Figure 15: Types of information that consumers would like insurers to share, May 2017
                                                  • Open Banking gives insurers the opportunity to get personal
                                                      • Figure 16: Types of information that consumers would be comfortable sharing with insurers, May 2017
                                                    • FCA calls for greater access to insurance…
                                                      • …and investigates insurers’ pricing practices
                                                        • IPT increases again
                                                          • Figure 17: Changes to the insurance premium tax rate, 1 October 1994-1 June 2017
                                                      • Companies and Brands – What You Need to Know

                                                        • Smart policies: the new-generation of add-ons
                                                          • Multiple policies under one umbrella
                                                            • Motor insurance accounts for over a third of total adspend
                                                            • Competitive Strategies

                                                              • Smart policies: the new-generation of add-ons
                                                                • Figure 18: Ownership/interest in owning smart devices, May 2017
                                                                • Figure 19: Willingness to share information from devices with insurers, May 2017
                                                              • Multiple policies under one umbrella
                                                                • Rewarding customer loyalty
                                                                  • Figure 20: Consumers’ perceptions of how well brands reward customer loyalty, August 2017
                                                              • Advertising and Marketing Activity

                                                                • Motor insurance accounts for over a third of total adspend
                                                                    • Figure 21: Total above-the-line, online display and direct mail advertising expenditure on general insurance, 2012/13-2016/17*
                                                                  • Confused.com spent more on ATL ads than any insurer in 2016/17
                                                                    • Figure 22: Top 20 brands for above-the-line, online display and direct mail advertising expenditure on general insurance, 2014/15-2016/17*
                                                                  • Sponsorships help to keep insurers in the public eye
                                                                    • TV remains insurers’ favoured ATL channel
                                                                      • Figure 23: Total above-the-line, online display and direct mail advertising expenditure on general insurance, by media type, 2016/17*
                                                                    • Nielsen Ad Intel coverage
                                                                    • The Consumer – What You Need to Know

                                                                      • Motor and home policies sit at the core of general insurance
                                                                        • Consumers show little loyalty towards general insurers
                                                                          • The importance of multichannel communication is clear
                                                                            • Price guarantees most likely to improve retention
                                                                              • Consumers want more ways to customise policies
                                                                                • Insurers can utilise Open Banking to improve engagement
                                                                                • Product Ownership

                                                                                  • Motor and home policies sit at the core of general insurance
                                                                                      • Figure 24: Insurance product ownership, September 2017
                                                                                    • Flexible policies can help to address the age and income gaps
                                                                                      • Figure 25: Insurance product ownership (any insurance), September 2017
                                                                                    • Most consumers have multiple policies
                                                                                      • Figure 26: Repertoire of insurance product ownership, September 2017
                                                                                  • Switching Activity

                                                                                    • Consumers show little loyalty towards general insurers
                                                                                      • Figure 27: Switching activity in general insurance markets, September 2017
                                                                                    • The loyalty exchange
                                                                                      • Price promises could improve retention
                                                                                      • Channel Preferences

                                                                                        • Online channels are favoured for basic interactions…
                                                                                          • … however less than half would go with an online-only provider
                                                                                              • Figure 28: Channel preferences in general insurance, September 2017
                                                                                            • Millennials demand more options
                                                                                            • Improving Customer Retention

                                                                                              • Price guarantees most likely to improve retention
                                                                                                • Figure 29: Things that would encourage consumers to renew policies with their existing insurers, September 2017
                                                                                              • Reward schemes could make younger consumers less price sensitive
                                                                                                • Figure 30: Things that would encourage consumers to renew policies with their existing insurers (ongoing rewards), September 2017
                                                                                            • Interest in New Features

                                                                                              • Consumers want more ways to customise policies
                                                                                                  • Figure 31: Interest in new features, September 2017
                                                                                                • PFMs could transform the way that Millennials access insurance
                                                                                                  • Figure 32: Interest in new features, by generation, September 2017
                                                                                                • Smart devices could give insurers a valuable new touchpoint
                                                                                                • Interest in Sharing Financial Data

                                                                                                  • Insurers can utilise Open Banking to improve engagement
                                                                                                    • Figure 33: Interest in sharing financial data with different providers, September 2017
                                                                                                  • Pro-active price comparison tools
                                                                                                  • Barriers to Data Sharing

                                                                                                    • Consumers concerned about insurers’ ability to handle data securely
                                                                                                        • Figure 34: Barriers to sharing financial data with insurance companies, September 2017
                                                                                                      • Convincing consumers of the value exchange
                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                          • Abbreviations
                                                                                                            • Consumer research methodology