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UK Consumers and Insurance Innovation 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 Insurance Innovation 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? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

For the purposes of this Report, Mintel has used the following definitions:

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

The main sectors 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.

Household – Household policies cover specified property that may be damaged or destroyed by events or perils such as fire, storm, subsidence or theft.

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. PMI (Private medical insurance) will pay the costs of medical treatment for acute conditions.

Pecuniary loss – Relates to financial losses that may have occurred, includes travel insurance, pet insurance, legal expenses, etc.

Other lines – includes extended warranties and mobile phone and gadget insurance.

Also relevant for this report:

Protection products – cover a person or their dependents should they lose their ability to earn an income. The largest sectors are term assurance and whole-of-life insurance.

General liability – covers third-party injury or damage claims. Includes public and product liability and employers’ liability.

Key points included

  • Innovation cannot be allowed to threaten financial inclusion
  • Security is still the key barrier to adopting new services
  • Innovation is generally seen to be positive

Expert analysis from a specialist in the field

Written by Irene Salazar, a leading analyst in the Financial Services sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Innovative and tech-based approaches to insurance are here to stay, but remain niche and are yet to significantly shake up the industry. Partnerships between traditional providers and start-ups will become more common to please that minority that values technology most, but effective overall innovation needs to start at the beginning: simplifying existing channels and processes and rewarding loyalty. Irene Salazar
Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Scope of this Report
        • Definitions
        • Executive Summary

            • The market
              • General insurance GWP up by 6% in 2017
                • Figure 1: Total UK general insurance market (Direct – UK risks), by gross written premiums, 2013-17
              • Direct channels offer opportunity to enhance customer relationship
                • Price comparison sites and innovation: a circular reference
                  • InsurTech and banking marketplaces
                    • GDPR and Open Banking come into force
                      • FCA calls for innovation to improve access to insurance
                        • Companies and brands
                          • InsurTech players in the FCA’s sandbox
                            • Comparison sites look to differentiate themselves
                              • Digital-only banking apps incorporate innovative insurance
                                • Multiple-product insurance that simplifies admin
                                  • Keeping up with consumer trends
                                    • The consumer
                                      • 88% of people have at least one insurance product
                                        • Figure 2: Insurance product ownership, October 2018
                                      • Satisfaction declines as customer journey progresses
                                        • Figure 3: Satisfaction with selected insurance activities, October 2018
                                      • Lack of engagement remains a challenge
                                        • Figure 4: Attitudes towards insurance, October 2018
                                      • A combination of basic but useful channels attracts the majority
                                        • Figure 5: Channel and contact preferences in insurance, October 2018
                                      • Consumers are most interested in being rewarded for their loyalty
                                        • Figure 6: Interest in insurance rewards and extras, October 2018
                                      • What we think
                                      • Issues and Insights

                                        • Innovation: a means to an end
                                          • The facts
                                            • The implications
                                              • Mobile apps have limited appeal
                                                • The facts
                                                  • The implications
                                                    • Rewarding loyalty: the ultimate innovation
                                                      • The facts
                                                        • The implications
                                                        • The Market – What You Need to Know

                                                          • General insurance GWP up by 6% in 2017, with variation in distribution channels by sector
                                                            • Price comparison sites and innovation: a circular reference
                                                              • InsurTech and banking marketplaces
                                                                • GDPR and Open Banking come into force
                                                                  • FCA calls for innovation to improve access to insurance
                                                                  • Market Context

                                                                    • Value of general insurance premiums grew by £2.8 billion in 2017
                                                                      • Figure 7: Total UK general insurance market (Direct – UK risks), by gross written premiums, 2013-17
                                                                    • Personal business accounts for almost two thirds of the market
                                                                      • Figure 8: Breakdown of the UK general insurance gross written premiums, by type of business, 2017
                                                                  • Insurance Distribution Channels

                                                                    • 80% of business written either directly or through brokers…
                                                                      • …but there are significant differences by sector
                                                                        • Figure 9: Distribution channels in personal general insurance, by risk, 2017
                                                                      • Price comparison sites are key to the insurance market
                                                                        • More than just a number
                                                                          • The more the merrier
                                                                            • Amazon: is a giant about to enter the PCW jungle?
                                                                              • InsurTech and banking marketplaces
                                                                              • Regulatory and Legislative Changes

                                                                                • GDPR and Open Banking come into force
                                                                                  • FCA calls for innovation to improve access to insurance
                                                                                    • FCA to measure value of add-ons
                                                                                      • BIBA manifesto calls for HM Treasury to remove IPT from telematics policies
                                                                                      • Companies and Brands – What You Need to Know

                                                                                        • InsurTech players in the FCA’s sandbox
                                                                                          • Reverse-auction marketplace challenge to PCWs
                                                                                            • Digital-only banking apps incorporate innovative insurance
                                                                                              • Multiple-product insurance that simplifies admin
                                                                                                • Keeping up with consumer trends
                                                                                                  • General insurance adspend increases by 12%
                                                                                                  • Launch Activity and Innovation

                                                                                                    • InsurTech players in the FCA’s sandbox
                                                                                                      • Laka: crowd-based cycle insurance
                                                                                                        • Pluto: chatbot insurance through Facebook Messenger
                                                                                                          • YouToggle: app telematics
                                                                                                            • Comparison sites look to differentiate themselves
                                                                                                              • Two new specialised PCWs
                                                                                                                • Making ‘quick quotes’ more accurate
                                                                                                                  • honcho’s reverse-auction marketplace
                                                                                                                    • Figure 10: honcho’s reverse marketplace
                                                                                                                  • Digital-only banking apps incorporate innovative insurance
                                                                                                                    • Multiple-product insurance
                                                                                                                      • Wrisk’s ‘macroinsurance’
                                                                                                                        • Back Me Up: flat monthly fee, no annual contract
                                                                                                                          • Insurance in the age of social media…
                                                                                                                            • …and the gig and sharing economies
                                                                                                                              • Channels and Developments
                                                                                                                                • The manufacturer’s role in car, contents and gadget insurance
                                                                                                                                  • Case study: Trōv’s partnership with Waymo
                                                                                                                                  • Advertising and Marketing Activity

                                                                                                                                    • General insurance adspend increases by 12%
                                                                                                                                      • Figure 11: Total above-the-line, online display and direct mail advertising expenditure on general insurance, 2013/14-2017/18*
                                                                                                                                    • Top 10 advertisers account for 54% of adspend in 2017/18
                                                                                                                                      • Figure 12: Top 20 brands for above-the-line, online display and direct mail advertising expenditure on general insurance, 2015/16-2017/18*
                                                                                                                                    • TV accounts for almost half of all ATL adspend
                                                                                                                                      • Figure 13: Total above-the-line, online display and direct mail advertising expenditure on general insurance, by media type, 2016/17 and 2017/18*
                                                                                                                                    • Nielsen Ad Intel coverage
                                                                                                                                    • The Consumer – What You Need to Know

                                                                                                                                      • 88% of people have at least one insurance product
                                                                                                                                        • Satisfaction declines as the customer journey progresses
                                                                                                                                          • Lack of engagement remains a challenge
                                                                                                                                            • A combination of basic but useful channels attracts the majority
                                                                                                                                              • Consumers most interested in being rewarded for their loyalty
                                                                                                                                              • Product Ownership

                                                                                                                                                • Motor and home policies are the most widely owned insurance products
                                                                                                                                                  • Figure 14: Insurance product ownership, October 2018
                                                                                                                                                • Multiple ownership increases with age
                                                                                                                                                  • Figure 15: Repertoire of insurance product ownership, by generation, October 2018
                                                                                                                                                • Open Banking can simplify buying and managing insurance
                                                                                                                                                • Satisfaction with Insurance Customer Journey

                                                                                                                                                  • Satisfaction varies by step of the customer journey…
                                                                                                                                                    • …and is more likely to drop as the relationship progresses
                                                                                                                                                      • Figure 16: Satisfaction with selected insurance activities, October 2018
                                                                                                                                                    • Overall levels of satisfaction with insurance are high…
                                                                                                                                                      • Figure 17: Overall satisfaction with most recently arranged insurance policy, October 2018
                                                                                                                                                    • …but certain aspects of the customer journey have a much higher impact
                                                                                                                                                      • Consumers need to feel they’ve got a good deal
                                                                                                                                                        • High expectations, higher standards
                                                                                                                                                          • Room for improvement
                                                                                                                                                            • Figure 18: Key drivers of overall satisfaction with insurance, October 2018
                                                                                                                                                            • Figure 19: Overall satisfaction with insurance – key driver output, October 2018
                                                                                                                                                        • Attitudes towards Insurance

                                                                                                                                                          • Back to basics
                                                                                                                                                            • Lack of engagement could make it easier for disruptors
                                                                                                                                                              • T&Cs apply
                                                                                                                                                                  • Figure 20: Attitudes towards insurance, October 2018
                                                                                                                                                                • Identifying those willing to connect smart tech and insurance
                                                                                                                                                                  • Insurers starting to incorporate new technology
                                                                                                                                                                    • Target demographic for insurance-related smart technology is identified
                                                                                                                                                                      • Figure 21: Attitudes towards insurance – CHAID – Tree output, October 2018
                                                                                                                                                                  • Channel and Contact Preferences

                                                                                                                                                                    • Mobile apps: not an asset but a liability?
                                                                                                                                                                      • Online access is taken for granted
                                                                                                                                                                        • UK-based call centres are a must
                                                                                                                                                                            • Figure 22: Channel and contact preferences in insurance, October 2018
                                                                                                                                                                          • A combination of basic but useful channels attracts the majority
                                                                                                                                                                            • Figure 23: TURF Analysis – interest in customer service channels in insurance, October 2018
                                                                                                                                                                        • Interest in Insurance Rewards and Extras

                                                                                                                                                                          • Consumers most interested in being rewarded for their loyalty…
                                                                                                                                                                            • …but are still on the lookout for introductory offers
                                                                                                                                                                              • Figure 24: Interest in insurance rewards and extras, October 2018
                                                                                                                                                                            • Extras remain extra
                                                                                                                                                                              • Insurers as a source of guidance or expertise have limited appeal
                                                                                                                                                                                • Figure 25: Interest in insurance innovations, by rank, October 2018
                                                                                                                                                                              • Interest in discounted or free smart devices is highest among parents
                                                                                                                                                                                • Ongoing rewards can take many shapes and forms
                                                                                                                                                                                • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                    • Abbreviations
                                                                                                                                                                                      • Consumer research methodology
                                                                                                                                                                                        • Key driver analysis methodology
                                                                                                                                                                                          • Interpretation of results
                                                                                                                                                                                            • Figure 26: Overall satisfaction with insurance – key driver output, October 2018
                                                                                                                                                                                            • Figure 27: Satisfaction with insurance, October 2018
                                                                                                                                                                                          • CHAID analysis methodology
                                                                                                                                                                                            • Figure 28: Attitudes towards insurance – CHAID – Table output, October 2018
                                                                                                                                                                                          • TURF analysis methodology
                                                                                                                                                                                            • Figure 29: Table – TURF Analysis – interest in customer service channels in insurance, October 2018