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Motor Insurance - UK - March 2017

Published By :

Mintel

Published Date : Mar 2017

Category :

Insurance

No. of Pages : N/A

The motor insurance industry has been hit hard by recent legislative changes to insurance premium tax and the personal injury discount rate. This will inevitably pass higher premiums on to young drivers in particular, who are already considering alternatives to car ownership such as car sharing schemes.
As a result providers will need to develop more flexible policies to suit part-time drivers, with InsurTech start-ups leading the way with the launch of on-demand insurance models.

Table of Content

OVERVIEW
What you need to know
Scope of this Report

EXECUTIVE SUMMARY
The market
Motor premiums reached new record high in 2016
Premiums set to soar again in 2017
Figure 1: Forecast of the value of gross written personal motor insurance premiums (UK business only), 2011-21
Companies and brands
Direct Line was the largest underwriter again in 2015
On-demand insurance
Direct Line and Aviva remain at the forefront
Figure 2: Attitudes, by brand, December 2016
The consumer
Nine out of 10 policyholders have fully comp
Figure 3: Ownership of motor insurance, November 2016
Only one in four policyholders chose not to shop around
Figure 4: Motor insurance renewal behaviour, December 2015 and November 2016
Lack of trust in renewal quote drives price comparison usage
Figure 5: Attitudes towards motor insurance, November 2016
Claimants still prefer to call
Figure 6: Motor insurance channel preferences, November 2016
Over two fifths interested in car sharing schemes
Figure 7: Interest in car sharing or rental schemes, November 2016
What we think

ISSUES AND INSIGHTS
How can motor insurers reduce price sensitivity?
The facts
The implications
Fewer young people getting in the driving seat
The facts
The implications
Will insurance and banking blur in to one?
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Premiums reached new record high in 2016
More cars, but fewer young drivers
Autonomous features start to impact insurers
IPT to increase to 12% in 2017
Discount rate slashed
Whiplash reforms set to offer respite

MARKET SIZE AND FORECAST
Premiums reached new record high in 2016
Figure 8: Gross written personal motor insurance premiums (UK business only), 2012-16
Market forecast
Premiums set to soar again in 2017
Brexit could inflate premiums
Figure 9: Forecast of the value of gross written personal motor insurance premiums (UK business only), 2011-21
Figure 10: Forecast of the value of gross written personal motor insurance premiums (UK business only), 2011-21
Forecast methodology

MARKET ENVIRONMENT
Number of licensed cars exceeds 30 million
Figure 11: Number of licensed vehicles (cars) in the UK, 1994-2015
New car sales hit record high
Figure 12: Number of new car registrations in 2011-16 and forecast for 2017-18
Government prepares for driverless cars
Premiums continued to harden in 2016
Figure 13: Average premium for comprehensive car insurance policies, 2012-16
Accidental damage fuels rise in claims costs
Figure 14: Volume and average cost of domestic motor insurance claims for private cars, 2013-16
Insurers made underwriting loss again in 2015
Figure 15: Personal motor insurance underwriting result, 2011-15

REGULATORY AND LEGISLATIVE CHANGES
IPT to increase to 12% in 2017
Figure 16: Changes to the insurance premium tax rate, 1 October 1994-1 June 2017
Discount rate slashed
Whiplash reforms set to offer respite
FCA wants insurers to offer more transparency
Brexit could add to insurer costs

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Direct Line was the largest underwriter again in 2015
Taking control of autonomous policies
On-demand insurance
Direct Line and Aviva remain prominent
Non-specialists highlight potential for others to diversify
Motor insurers put the brakes on ATL adspend

UNDERWRITER SHARE
Direct Line was the largest underwriter again in 2015
Figure 17: Top 10 personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2013-15 (UK business only)

COMPETITIVE STRATEGIES
Taking control of autonomous policies
Telematics: insurers look to break out of a niche market
Big Data now a big issue
InsurTech reinvigorates industry
On-demand insurance
Figure 18: Just Miles app screenshot, launched February 2017
GoCompare and esure part ways
Good customer service seen to boost renewals…
now for increased transparency

ADVERTISING AND MARKETING ACTIVITY
Motor insurers put the brakes on ATL adspend
Figure 19: Total above-the-line, online display and direct mail advertising expenditure on car insurance, 2012-16
TV still the driving force for ATL campaigns
Figure 20: Total above-the-line, online display and direct mail advertising expenditure on car insurance, by media type, 2016
Direct Line looks to stay in the public eye
Figure 21: Above-the-line, online display and direct mail advertising expenditure on car insurance, by the top 20 advertisers, 2014-16
Nielsen Ad Intel coverage

BRAND RESEARCH
What you need to know
Brand map
Figure 22: Attitudes towards and usage of selected brands, December 2016
Key brand metrics
Figure 23: Key metrics for selected brands, December 2016
Brand attitudes: Saga’s focus on over-50s makes it stand out
Figure 24: Attitudes, by brand, December 2016
Brand personality: Humorous TV ads help Direct Line build a fun image
Figure 25: Brand personality – Macro image, December 2016
People are most positive about established traditional insurers
Figure 26: Brand personality – Micro image, December 2016
Brand analysis
Direct Line and Aviva remain prominent
LV=, AXA and Zurich also viewed positively, but lack standout
Admiral, Churchill and MORE TH>N
Non-specialists highlight potential for others to diversify
Swinton seen as less accessible despite vast branch network

THE CONSUMER – WHAT YOU NEED TO KNOW
Nine out of 10 policyholders have fully comp
Aviva and Direct Line prove it’s not all about price comparison
Half of consumers go for the cheapest option
Only one in four policyholders chose not to shop around
Claimants still prefer to speak to someone
Over two fifths interested in car sharing schemes

OWNERSHIP OF MOTOR INSURANCE
Nine out of 10 policyholders have fully comp
Figure 27: Ownership of motor insurance, November 2016
A third of 17-24s don’t have a driving licence
Figure 28: Proportion of consumers without a driving licence, by age, November 2016

MOTOR INSURANCE PROVIDERS
Aviva and Direct Line prove it’s not all about price comparison
Figure 29: Motor insurance providers, November 2016
AA highlights the potential for cross-selling

REASONS FOR CHOOSING PROVIDER
Half of consumers go for the cheapest option
Figure 30: Reasons for choosing current motor insurance provider/policy, November 2016
Packages for new car owners
Cuvva for the holidays

MOTOR INSURANCE RENEWAL BEHAVIOUR
Only one in four policyholders chose not to shop around
Figure 31: Motor insurance renewal behaviour, December 2015 and November 2016
Renewal communications should be sent digitally

MOTOR INSURANCE CHANNEL PREFERENCES
Claimants still prefer to call
Figure 32: Motor insurance channel preferences, November 2016
Management apps can make mobile go mainstream

ATTITUDES TOWARDS MOTOR INSURANCE
Lack of trust in renewals drives price comparison usage
Figure 33: Attitudes towards motor insurance, November 2016
Customisation and transparency will appease consumers

INTEREST IN CAR SHARING POLICIES
Over two fifths interested in car sharing schemes
Figure 34: Interest in car sharing or rental schemes, November 2016
Customer-centric insurance models
Figure 35: Preferred types of insurance cover for car sharing or rental schemes, November 2016

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

APPENDIX – MARKET SIZE AND FORECAST
Additional best/worst forecast table
Figure 36: Best- and worst-case forecast for the value of gross written premiums for personal motor insurance (UK business only), 2016-21
Forecast methodology

List of Table

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