Table of Contents
- Issues in the Market
- Mintel asks...
- Definitions
- Sector focus
- Abbreviations
- Insights and Opportunities
- Some scope for expansion in the motor and home sectors
- Rising premiums prompt more to shop around
- Premium match promise
- Brokers under pressure from aggregators
- A good reputation gets around
- Decent demand for eco-friendly products
- Report in Brief
- Best trading result in years, despite fall in income...
- ...across several personal and commercial lines
- Looking ahead
- Containing claims costs is the number one challenge
- Climate change tops both the political and corporate agenda
- The largest underwriters
- Distribution trends
- Advertising activity
- The key findings of Mintel' s consumer research
- Figure 1: Penetration of the most common insurance products, October 2007
- Buying, claiming and switching behaviour
- Figure 2: Buying, claiming and switching behaviour -- motor and
household policyholders, October 2007
- Direct versus intermediary versus aggregator
- Figure 3: Shopping around and channel preference -- motor and household
policyholders, October 2007
- Product and provider selling points
- Figure 4: What consumers look for in an insurance policy/provider,
October 2007
- Industry Issues and Drivers
- What factors are driving change in the general insurance market?
- Figure 5: Summary of the main challenges facing general insurers in the
UK, 2007
- Changing demographics
- Environmental impact
- Techno revolution
- Figure 6: Timeline of entry for direct writers of general insurance,
1985-2005
- Online aggregators: the good and the bad
- Figure 7: Timeline of entry for financial/insurance price-comparison
sites, 1999-2007
- Power to the people
- It' s all about price
- New rules push up costs
- FSA proposes a ' NEWICOB'
- A large and expanding car parc underpins demand for motor insurance
- Figure 8: Private motor insurance -- market drivers and supressors, 2007
- Changing social and lifestyle trends shape the household sector
- Figure 9: Domestic property insurance -- market drivers and supressors,
2007
- Annual travel policies a popular choice for frequent travellers
- Figure 10: Travel insurance -- market drivers and supressors, 2007
- Health sector regains strength
- Figure 11: Health insurance -- market drivers and supressors, 2007
- Market Size and Forecast
- Key points
- Motor and property are the largest sectors
- Figure 12: Illustration of gross annual written general insurance
business -- UK risks, by sector, 2002-06
- Only the accident and health sector sees premium growth in 2006...
- Figure 13: Summary of annual general insurance business -- UK risks, by
sector, 2002-06
- ...still, 2006 sees best trading result in years
- Figure 14: UK outgo for annual general insurance business, 2002-06
- Hardening rates will underpin future growth in the motor and property
sectors
- Figure 15: Forecast of gross written annual general insurance business
-- UK risks, by sector, at current and constant prices, 2007-12
- Factors incorporated
- Sector Performance
- Key points
- Sector analysis -- winners and losers
- Figure 16: Detailed premium analysis -- UK, by selected class of
business, 2006
- Figure 17: Share of total premium income (UK annual business), by
sector, 2006
- Private motor sector bows under pricing pressure
- Figure 18: UK private motor -- underwriting result, 2002-07
- Domestic property market continues on an upward path
- Figure 19: UK domestic property -- underwriting result, 2002-07
- A low claims ratio ensures solid performance from the accident sector
- Figure 20: UK accident and health -- underwriting result, 2002-06
- Demand for annual policies gives fresh impetus to the travel sector
- Figure 21: UK travel insurance -- volume and value of policies written,
by type, 2004-06
- Claims Experience
- Key points
- Net cost of private motor claims stabilises in 2006
- Figure 22: Net claims incurred -- UK annual general insurance business,
by sector, 2002-06
- Figure 23: Net claims incurred index -- UK annual general insurance
business, by sector, 1997-2006
- Pecuniary loss has the lowest claims ratio, motor the highest
- Figure 24: Claims ratio -- UK annual general insurance business, by
sector, 1997-2006
- Fire and theft were the top perils for property insurers in 2006
- Figure 25: Gross claims incurred -- UK domestic property, by type of
claim, 2002-06
- Effective claims management is number one priority
- Two thirds of private motor claims related to accidental damage in 2006
- Figure 26: Number of claims notified -- UK private motor, by type of
claim, 2002-06
- Rejected claims more common in the non-comprehensive motor sector
- Figure 27: Proportion of home and motor insurance policyholders who have
made a claim within the past three years, by type of policy, October 2007
- Undetected fraud adds an extra £40 a year onto the average premium
- Figure 28: Estimated value of undetected fraudulent general insurance
claims, 2006
- Property sector has highest incidence of fraudulent claims
- Figure 29: Estimated value of undetected retail opportunistic fraud and
average claim size, by product category, 2006
- Rising costs push up premiums
- Figure 30: AA British Insurance Premium Index -- market average trends,
July 1994-October 2007
- Young drivers pay more because they cost more
- Figure 31: Average market and shoparound motor and home insurance
premiums, 1994 and 2007
- The Challenge of Climate Change
- Key points
- The costs stack up...
- ...but there are opportunities too
- Cover for flood-risk households under threat
- Greater investment in flood defences needed
- Climate change driving new innovation
- Eco-friendly home insurance
- Green motor cover
- Carbon-neutral companies
- Insurers get ClimateWise
- Consumers prepared to pay more for eco-friendly products
- Figure 32: Proportion of people who are influenced by
ethical/environmental factors in their choice of financial provider,
November 2007
- Implication and opportunity
- Two thirds of adults make an effort to be eco-friendly
- Figure 33: Agreement with statements about environmental issues, by
gender, October 2007
- Implication and opportunity
- Those aged 25-44 are the ' greenest' consumers
- Figure 34: Agreement with statements about environmental issues, by age
group, October 2007
- Scope to improve the South' s eco credentials
- Figure 35: Agreement with statements about environmental issues, by
region, October 2007
- Implication and opportunity
- Insurance policyholders even more eco-conscious
- Figure 36: Agreement with statements about environmental issues, by
ownership of selected general insurance products, October 2007
- Implication and opportunity
- Dividing the population into five clusters
- Figure 37: Segmenting the population based on attitudes towards the
environment, October 2007
- Figure 38: Cluster composition based on attitudes towards environmental
issues, October 2007
- Super Green
- Eco-friendly
- Flood-sensitive
- Pragmatist
- Apathetic
- Trade Perspective
- About the respondents
- Providers support proposals for a two-tier regulatory system
- Aggregators: an aggravation or an invaluable tool?
- Understand, educate and adapt to climate change
- The debate over flood cover
- Aggressive pricing and shifting distribution power are also issues of
concern
- Underwriter Share
- Key points
- Aviva tops the general insurance rankings
- Figure 39: Largest general (re)insurers -- total market (direct and
faculative business), 2005 and 2006
- Several of the largest players specialise in the commercial sector
- Positions vary across different sectors
- Figure 40: Top ten general insurers, by sector (personal lines only),
based on share of total gross earned premiums, 2006
- Two brands dominate the health sector...
- ...ditto, the pet insurance market
- RBS claims top spot in the car market
- Tesco makes its mark
- Several banking groups have diversified into the insurance market
- Norwich Union puts greater focus on customer retention
- Brand Promotion and Advertising
- Key points
- Motor and home insurance attract heavy ad investment
- Advertising trends
- Figure 41: Total advertising expenditure on general insurance, by
product category, 2004/05-2006/07
- Direct mail is the medium of choice
- Figure 42: Proportional distribution of general insurance adspend, by
main media type, 2006/07
- The value of direct mail
- Direct Line spent the most on advertising in 2006/07
- Figure 43: Top 20 general insurance advertisers, by advertising
expenditure, 2004/05-06/07
- Confused.com is the only aggregator to make the top 20
- Three bank brands feature
- BUPA uses animation to get a simple message across
- Several brands specialise in the over-50s market
- Others
- Distribution Developments
- Key points
- Intermediaries under pressure from direct players, bancassurers and
affinity brands
- Figure 44: Proportional distribution of UK personal lines general
insurance, by channel, 2002-06
- Direct sales channel dominates the motor market...
- Figure 45: Proportional distribution of UK private motor insurance, by
channel, 2006
- ...while intermediaries continue to lead the way in the household sector
- Figure 46: Proportional distribution of UK domestic property insurance,
by channel, 2006
- The rise of the retailers
- Figure 47: Selected non-traditional providers' insurance ranges and
their partners, December 2007
- The Internet has created cost-saving opportunities...
- Figure 48: Proportion of motor and home insurance policyholders who have
bought a policy or searched online for a quote, October 2007
- ...but is less effective at upselling extras
- Admin costs may have lowered, but acquisition costs have risen
- Weighing up offshoring
- Figure 49: Selected insurers split according to location of call centre
roles, February 2007
- The Consumer -- Insurance Product Ownership
- Key points
- About Mintel' s consumer survey
- Motor and household insurance are the most common types held
- Figure 50: Ownership of insurance products, October 2007
- Implication and opportunity
- Still much confusion over legal cover
- Super Greens and Pragmatists record highest take-up rates
- Figure 51: Ownership of insurance products, by environmental clusters,
October 2007
- Product synergies abound
- Figure 52: Cross-analysis -- ownership of insurance products, October
2007
- Implication and opportunity
- Wealth is a major determiner of insurance take-up
- Figure 53: Target groups identified for selected general insurance
products, October 2007
- One in seven have no insurance provision
- Figure 54: Number of insurance products owned, October 2007
- Figure 55: Type of policy held, by number of insurance products owned,
October 2007
- Low income groups face greatest risks but are least likely to have cover
- Figure 56: Number of insurance products owned, by gender, age,
socio-economic group, lifestage, working status and gross annual household
income, October 2007
- Implication and opportunity
- Many in the Apathetic group lack adequate insurance protection
- Figure 57: Number of insurance products owned, by environmental
clusters, October 2007
- The Consumer -- Home Insurance
- Key points
- One in eight household policyholders arranged cover online
- Figure 58: Buying home insurance, claims experience and switching
behaviour, by type of policy, October 2007
- Implication and opportunity
- Less than two fifths say they' ve never made a claim...
- ...while a quarter have switched providers within the past three years
- Implication and opportunity
- 7% of recent claimants have had their claim rejected
- Figure 59: Cross-analysis -- buying home insurance online, claims
experience and switching behaviour, October 2007
- The loyal Eco-friendly are least likely to make a claim
- Figure 60: Buying home insurance online, claims experience and switching
behaviour, by environmental clusters, October 2007
- A third of policyholders will habitually shop around
- Figure 61: Home insurance-buying behaviour, channel preference and
influences, October 2007
- Implication and opportunity
- A fifth find online comparison sites ' useful'
- Implication and opportunity
- Aggregators encourage shoparound mentality
- Figure 62: Cross-analysis -- home insurance-buying behaviour, channel
preference and influences, October 2007
- Implication and opportunity
- The rise of the Internet has encouraged consumers to shop around
- Figure 63: Home insurance-buying behaviour, channel preference and
influences, by buying online, claims experience and switching behaviour,
October 2007
- Super Greens take note of consumer advice
- Figure 64: Home insurance-buying behaviour, channel preference and
influences, by environmental clusters, October 2007
- Implication and opportunity
- The Consumer -- Motor Insurance
- Key points
- One in four bought their motor policy online
- Figure 65: Buying motor insurance, claims experience and switching
behaviour, by type of policy, October 2007
- Implication and opportunity
- Those aged 55-64 are most likely to switch
- Figure 66: Buying motor insurance online, claims experience and
switching behaviour, by gender and age, October 2007
- Proportion of rejected motor claims is on par with the household sector
- Figure 67: Cross-analysis -- buying motor insurance online, claims
experience and switching behaviour, October 2007
- Super Greens are most likely to switch, buy online and make a claim
- Figure 68: Buying motor insurance online, claims experience and
switching behaviour, by environmental clusters, October 2007
- Many policyholders appreciate the ' driving other cars' provision
- Figure 69: Motor insurance-buying behaviour and channel preference, by
type of policy, October 2007
- Implication and opportunity
- Four in five users of online aggregators find them ' useful'
- Figure 70: Cross-analysis -- motor insurance-buying behaviour and
channel preference, October 2007
- Encouraging consumers to shop around creates more churn
- Figure 71: Motor insurance-buying behaviour and channel preference, by
buying online, claims experience and switching behaviour, October 2007
- Super Greens like to shop around
- Figure 72: Motor insurance-buying behaviour and channel preference, by
environmental clusters, October 2007
- The Consumer -- Policy Selling Points
- Key points
- Comprehensive cover is more important than price, say home and motor
policyholders
- Figure 73: What people most want from an insurance policy, October 2007
- Those looking for clearly explained terms also want efficient claims
handling
- Figure 74: Cross-analysis -- what people most want from an insurance
policy, October 2007
- Recent and potential switchers have high expectations
- Figure 75: What people most want from an insurance policy, by recent and
potential home and motor insurance switchers, October 2007
- The Flood-sensitive look for a well-known brand
- Figure 76: What people most want from an insurance policy, by
environmental clusters, October 2007
- Further analysis
- Product Penetration -- Detailed Demographics (1)
- Figure 77: Ownership of general insurance products (1), by gender, age,
socio-economic group, marital status, lifestage, Mintel' s Special Groups and
working status, October 2007
- Figure 78: Ownership of general insurance
products (1), by tenure, gross annual household income, region and ACORN
category, October 2007
- Figure 79: Ownership of general insurance products (1), by new
technology usage, newspaper readership, commercial TV viewing and
supermarket usage, October 2007
- Product Penetration -- Detailed Demographics (2)
- Figure 80: Ownership of general insurance products (2), by gender, age,
socio-economic group, marital status, lifestage, Mintel' s Special Groups and
working status, October 2007
- Figure 81: Ownership of general insurance
products (2), by tenure, gross annual household income, region and ACORN
category, October 2007
- Figure 82: Ownership of general insurance products (2), by new
technology usage, newspaper readership, commercial TV viewing and
supermarket usage, October 2007
- Profile of Clusters -- Detailed Demographics
- Figure 83: Cluster profile, by gender, age, socio-economic group,
marital status, lifestage and working status, October 2007
- Figure 84:
Cluster profile, by tenure, gross annual household income, region and ACORN
category, October 2007
- Figure 85: Cluster profile, by new technology usage,
newspaper readership, commercial TV viewing and supermarket usage, October
2007
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