Abstract
The general insurance market in the UK is fairly fragmented and fiercely competitive, despite the top ten underwriters controlling around two thirds of the market. As barriers to entry have fallen, new suppliers and distributors have emerged, leading to a crowded marketplace. Cannibalism is also rife, with many insurers operating multiple brands, which ultimately compete with each other. Regulatory constraints mean there is little scope for product differentiation, while low customer loyalty and the growing influence of online aggregator sites continue to put the focus on price.
Margins are also under pressure from rising claims costs. Although claims handling processes have generally been improved and more efficient practices adopted in recent years, the unpredictable and sometimes catastrophic nature of risks can so easily result in industry-wide losses, as the summer 2007 floods testify to. Some 147,000 properties and 18,000 vehicles were affected, leading to an estimated claims bill of around £3 billion. The floods have given greater urgency to the debate over the sustainability of flood cover and the whole issue of climate change.
As insurers begin to explore ways of mitigating the risks associated with climate change and as they cultivate new eco-friendly practices and products, Mintel asks consumers what they think of some of these developments. We look at how attitudes and behaviours are changing in light of growing consumer awareness of environmental issues. Along with assessing overall product penetration, we explore policyholder buying behaviour and switching intentions in relation to the two most common general insurance types: motor and household. In addition to consumer survey analysis, the report provides a comprehensive overview of the market, in terms of its size, recent performance, claims history, underwriter share and advertising and distribution trends.
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