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UK Motor Insurance market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Motor 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? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key points included

  • Impressive levels of satisfaction can be problematic
  • The market is congested but has room for a truly different provider
  • Drivers have good intentions to buy high-level cover, but cost is key

Covered in this report

This report explores the UK domestic car insurance market. It includes discussion of the size of the market, including a forecast for the value of premiums over the next five years. Key market drivers and regulatory changes are discussed, as well as the performance and activities of major players in the industry.

Mintel’s exclusive consumer research includes brand research, looking at consumers’ awareness, use and perceptions of selected car insurers as well as the type of insurance held. The Report also looks at renewal behaviour and the reasons why some drivers fail to shop around for policies, factors influencing policy choice and satisfaction with existing cover. Finally, the research explores attitudes towards car insurance, such as the importance of getting high-level cover and the extent to which people think insurers are all the same.

Expert analysis from a specialist in the field

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

The expected revision of the personal injury discount rate to a more insurer-friendly level will allow providers to ramp up price competition. This is crucial as consumers remain price-sensitive, despite a preference for high-level cover. However, some upward pressure on prices will remain, as the cost of car repair claims hit record levels in 2018. Richard Shepherd
Senior Financial Services Analyst

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Table of contents

  1. Overview

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

          • The market
            • Premiums remained at record levels in 2018
              • Figure 1: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2013-23
            • Companies and brands
              • Direct Line is the UK’s largest personal motor insurer
                • Figure 2: Leading personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2016 and 2017 (UK business only)
              • Confused.com remains the biggest car insurance advertiser
                • Figure 3: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2014-18
              • Insurers struggle for differentiation
                • Figure 4: Attitudes towards and usage of selected brands, January 2019
              • The consumer
                • Comprehensive policies dominate the market
                  • Figure 5: Car insurance ownership, insurance holders only (rebase), November 2018
                • General insurers’ heritage puts them out in front
                  • Figure 6: Current car insurance provider, November 2018
                • A third of drivers switched at their last renewal
                  • Figure 7: Behaviour at last car insurance policy renewal, rebase, November 2018
                • Satisfaction with renewal quotes is the biggest barrier to shopping around
                  • Figure 8: Reasons for not shopping around at last car insurance renewal, November 2018
                • Price is the key driver in product choice
                  • Figure 9: Factors affecting choice of car insurance policy, November 2018
                • Insurers achieve impressive levels of satisfaction
                  • Figure 10: Satisfaction with current car insurance policy, November 2018
                • There is still work to be done on improving transparency
                  • Figure 11: Attitudes towards car insurance, November 2018
                • What we think
                • Issues and Insights

                  • Drivers have good intentions to buy high-level cover, but cost is key
                    • The facts
                      • The implications
                        • The market is congested but has room for a truly different provider
                          • The facts
                            • The implications
                              • Impressive levels of satisfaction can be problematic
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • Premiums remained at record levels in 2018…
                                      • …but new car sales slumped
                                        • Claims costs reach a record £8.6 billion
                                          • Civil Liability Act becomes law
                                          • Market Size and Forecast

                                            • Premium growth flattened in 2018
                                              • Figure 12: Gross written personal motor insurance premiums (UK domestic business only), 2014-18
                                            • Premiums expected to rise slowly and unevenly
                                              • Figure 13: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2013-23
                                              • Figure 14: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), at current and constant prices, 2013-23
                                            • Forecast methodology
                                            • Market Environment

                                              • Car parc growth halved in 2018…
                                                • Figure 15: Number of licensed cars, Great Britain, 2010-18
                                              • …but car ownership remains consistent
                                                • Figure 16: Car ownership, November 2018
                                              • New car sales fell by 7%
                                                • Figure 17: Number of new car registrations, 2012-18
                                              • Premiums fell slightly in 2018
                                                • Figure 18: Average premium for comprehensive car insurance policies, annual data, 2014-18
                                                • Figure 19: Average premium for comprehensive car insurance policies, quarterly data, Q1 2014-Q4 2018
                                              • The cost of claims reached a record high in 2018
                                                • Figure 20: Volume and gross value of private car claims settled, 2013-18
                                            • Regulatory and Legislative Changes

                                              • Civil Liability Act becomes law
                                                • Brexit questions still to be answered
                                                  • Consultation launched into autonomous cars
                                                    • FCA investigating general insurance pricing
                                                    • Companies and Brands – What You Need to Know

                                                      • Direct Line is the UK’s largest personal motor insurer
                                                        • Aviva looks to innovation to stay near the top
                                                          • Insurers are innovating to reflect changing driving habits
                                                            • Confused.com remains the biggest car insurance advertiser
                                                              • Insurers struggle for differentiation
                                                              • Market Share

                                                                • Direct Line is the UK’s largest personal motor insurer
                                                                  • Admiral continues to grow
                                                                    • Figure 21: Top 20 domestic motor insurance underwriters – UK, by share of total market GWP – ABI members only, 2017
                                                                  • Aviva looks to innovation to stay near the top
                                                                    • Hastings enjoyed impressive growth in 2017
                                                                      • Figure 22: Leading personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2016 and 2017 (UK business only)
                                                                  • Launch Activity and Innovation

                                                                    • Catering for changing driving habits
                                                                      • By Miles introduces pay-per-mile insurance for low-mileage drivers
                                                                        • Allianz signs up to insure Drivy users
                                                                          • Preparing for automated cars
                                                                            • AXA signs up to provide car insurance through InsurTech app Brolly
                                                                              • CarFinance 247 to move into the insurance space
                                                                              • Advertising and Marketing Activity

                                                                                • Adspend topped £100 million despite annual drop
                                                                                  • Figure 23: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2014-18
                                                                                • Confused.com remains the biggest advertiser, ahead of Direct Line
                                                                                  • Figure 24: Top 10 spenders of above-the-line, online display and direct mail advertising on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2016-18
                                                                                • TV is the primary advertising channel
                                                                                  • Figure 25: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, by media type, 2018
                                                                                • Nielsen Ad Intel coverage
                                                                                • Brand Research

                                                                                    • Brand map
                                                                                      • General insurers struggle to stand out and attract limited trust
                                                                                        • Figure 26: Attitudes towards and usage of selected brands, January 2019
                                                                                      • Key brand metrics
                                                                                        • Post Office can leverage frequent use of other business lines to promote insurance
                                                                                          • Figure 27: Key metrics for selected brands, January 2019
                                                                                        • Brand attitudes: Breakdown providers benefit from strong reputations
                                                                                          • Figure 28: Attitudes, by brand, January 2019
                                                                                        • Brand personality: Direct Line stands out as a fun brand
                                                                                          • Figure 29: Brand personality – macro image, January 2019
                                                                                        • Brand personality: The AA and RAC are seen as reliable
                                                                                          • Figure 30: Brand personality – micro image, January 2019
                                                                                        • Brand analysis
                                                                                          • Breakdown providers are well placed to capitalise on recovery reputations
                                                                                            • Entertaining adverts rub off on Direct Line
                                                                                              • Aviva and Direct Line lead other general insurers for preference
                                                                                              • The Consumer – What You Need to Know

                                                                                                • Comprehensive policies dominate the market
                                                                                                  • General insurers’ heritage puts them out in front
                                                                                                    • A third of drivers switched at their last renewal
                                                                                                      • Satisfaction with renewal quotes is the biggest barrier to shopping around
                                                                                                        • Price is the key driver in product choice
                                                                                                          • Insurers achieve impressive levels of satisfaction
                                                                                                            • There is still work to be done on improving transparency
                                                                                                            • Car Insurance Ownership

                                                                                                              • Comprehensive policies dominate the market
                                                                                                                • Figure 31: Car insurance ownership, November 2018
                                                                                                                • Figure 32: Car insurance ownership, insurance holders only (rebase), November 2018
                                                                                                              • Under-25s more likely to choose third-party cover than telematics
                                                                                                                • Figure 33: Car insurance ownership, insurance holders only (rebase), by age, November 2018
                                                                                                            • Car Insurance Providers

                                                                                                              • General insurers’ heritage puts them out in front
                                                                                                                • Figure 34: Current car insurance provider, November 2018
                                                                                                              • The AA is particularly successful at attracting younger drivers
                                                                                                                • Figure 35: Type of current car insurance provider, by age, November 2018
                                                                                                            • Renewal and Arrangement Behaviour

                                                                                                              • A third of drivers switched at their last renewal
                                                                                                                • Figure 36: Behaviour at last car insurance policy renewal or arrangement, November 2018
                                                                                                                • Figure 37: Behaviour at last car insurance policy renewal, rebase, November 2018
                                                                                                              • Shopping around is accepted as the done thing…
                                                                                                                • Figure 38: Likelihood to shop around at next car insurance renewal, November 2018
                                                                                                              • …but vulnerable consumers are most at risk of missing the best deals
                                                                                                                • Figure 39: Likelihood to shop around at next car insurance renewal, by household financial situation, November 2018
                                                                                                            • Barriers to Shopping Around at Renewal

                                                                                                              • 62% who didn’t shop around didn’t see a need to
                                                                                                                • Figure 40: Reasons for not shopping around at last car insurance renewal, November 2018
                                                                                                              • Younger drivers are more apathetic, over-45s have more valuable relationships
                                                                                                                • Figure 41: Selected reasons for not shopping around at last car insurance renewal, by age, November 2018
                                                                                                            • Factors Affecting Choice of Policy

                                                                                                              • Price is the key driver in product choice
                                                                                                                • Figure 42: Factors affecting choice of car insurance policy, November 2018
                                                                                                              • Just 17% got the highest-level cover they could afford
                                                                                                                • Reputational factors matter to those who can afford to consider them
                                                                                                                  • Figure 43: Selected factors affecting choice of car insurance policy, by household financial situation, November 2018
                                                                                                              • Satisfaction with Car Insurance

                                                                                                                • Insurers achieve impressive levels of satisfaction
                                                                                                                  • Figure 44: Satisfaction with current car insurance policy, November 2018
                                                                                                              • Attitudes towards Car Insurance

                                                                                                                • Drivers’ desire for high-level cover clashes with demand for low prices
                                                                                                                  • Figure 45: Attitudes towards car insurance, November 2018
                                                                                                                • Trust and differentiation are in short supply
                                                                                                                  • There is still work to be done on improving transparency
                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                      • Abbreviations
                                                                                                                        • Consumer research methodology
                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                            • Figure 46: Best- and worst-case forecast for the value of gross written premiums for personal motor insurance (UK business only), 2018-23
                                                                                                                          • Forecast methodology