Motor Insurance - UK - March 2020

Motor Insurance - UK - March 2020

  • Mintel
  • March 2020
  • Insurance
  • 0 pages

Report Description

1
1

The car insurance market experienced a turbulent 2019, with many providers posting a reduced income, and profit. Despite this there are positive signs for the market over the next five years. With greater clarification over the Ogden rate, providers will be more confident in their pricing strategies.

Additionally, the move toward more flexible products is long overdue. New drivers in particular would value this approach, with the traditional car insurance model no longer fit for purpose for this group.

Have query on this report?

Make an Enquiry

Table of Contents

OVERVIEW
What you need to know
Scope of this Report
EXECUTIVE SUMMARY
The market
Total car insurance premiums fall in 2019
Figure 1: Gross written personal motor insurance premiums (UK domestic business only), 2015-19
Premiums forecast to return to growth over the next five years
Figure 2: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2014-24
New car registrations decline for the third consecutive year
Figure 3: Number of new car registrations and used car sales, 2013-19
Average premiums reach the highest level since 2017
Figure 4: Average premium for comprehensive car insurance policies, quarterly data, Q1 2015-Q4 2019
Rising claims costs are a growing challenge in the market
Figure 5: Volume and gross value of private car claims settled, Q1 2015-Q3 2019
Insurers left dissatisfied by the Ogden rate change
Companies and brands
Admiral is the UK’s largest motor insurer
Rising claims costs hit profits at Hastings and Ageas
More flexible solutions enter the market
Honcho launches in a bid to challenge traditional PCWs
Insurers struggle for trust and differentiation
Figure 6: Attitudes towards and usage of selected brands, February 2020
The consumer
Rising car insurance penetration
Figure 7: Car insurance ownership, 2017, 2018 & 2019, November 2019
People prefer to remain with their existing provider
Figure 8: Behaviour at last car insurance policy renewal or arrangement, November 2019
Smartphones and tablets are niche channels when managing a policy
Figure 9: Preferred methods of interacting with insurers, November 2019
Price and quality are the key purchasing factors
Figure 10: Motor insurance purchase drivers, November 2019
A protected no claims bonus stands out as the most important feature
Figure 11: Most important policy features, November 2019
Policy-related actions are most popular when saving on car insurance
Figure 12: Actions taken to reduce the cost of car insurance, November 2019
The majority enjoy looking for a good deal
Figure 13: Attitudes towards car insurance, November 2019
What we think
ISSUES AND INSIGHTS
Providers will have to be selective in who they reward for loyalty
The facts
The implications
Younger drivers force the development of new insurance models
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Total car insurance premiums fall in 2019
New car registrations decline for the third consecutive year
Average premiums reach the highest level since 2019
Rising claims costs a growing challenge in the market
Insurers left dissatisfied by the Ogden rate change
The FCA steps up efforts to tackle the ‘loyalty penalty’
MARKET SIZE AND FORECAST
Marginal fall in car insurance premiums for the second consecutive year
Figure 14: Gross written personal motor insurance premiums (UK domestic business only), 2015-19
Premiums expected to return to growth over the next five years
Figure 15: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2014-24
Forecast methodology
MARKET DRIVERS
Marginal car parc growth in 2019
Figure 16: Number of licensed cars, Great Britain, 2010-19
New and used car sales decline for the third consecutive year
Figure 17: Number of new car registrations and used car sales, 2013-19
Average annual premium falls …
Figure 18: Average premium for comprehensive car insurance policies, annual data, 2012-19
… but premiums track upwards in the second half of 2019
Figure 19: Average premium for comprehensive car insurance policies, quarterly data, Q1 2015-Q4 2019
Claims costs rise whilst the number of claims settled falls
Figure 20: Volume and gross value of private car claims settled, Q1 2015-Q3 2019
The number of younger drivers dramatically rises in 2018
REGULATORY AND LEGISLATIVE CHANGES
Government raises the Ogden discount rate but by less than expected
FCA proposes remedies to tackle the ‘loyalty penalty’
New claims system to minimise whiplash pay-outs set for release
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Admiral is the UK’s largest motor insurer
Direct Line sees premium income decline in 2019
Rising claims costs hit profits at Hastings and Ageas
More flexible solutions enter the market
Honcho launches in a bid to challenge traditional PCWs
Insurers struggle for trust and differentiation
MARKET SHARE
Admiral expands its influence
Direct Line Group saw premium income decline in 2019
Allianz becomes the UK’s third largest motor insurer
Aviva’s premium income falls
Rising claims costs impact profits at both Hastings and Ageas
Figure 21: Selected leading personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2017-18 (UK business only)
LAUNCH ACTIVITY AND INNOVATION
The trend toward improving flexibility continues
By Miles partners with Tesla
Cuvva looks set to enter the monthly subscription market
BGL enters the short-term car insurance market
New fintech partnerships help brands extend their influence
Direct Line partners with Drover …
… while Allianz teams up with Wrisk
New reverse-auction marketplace app launces
Comparethemarket.com hopes to save those paying the ‘loyalty penalty’
ADVERTISING AND MARKETING ACTIVITY
Total advertising spend falls for the second consecutive year
Figure 22: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2016-19
LV= was the largest spender on car insurance advertising in 2019
PCWs drastically increase their adspend
Churchill replaces the iconic ‘nodding dog’
Figure 23: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, by advertiser, 2017-19
TV accounts for the majority of advertising expenditure
Figure 24: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, by media type, 2019
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Insurers struggle for trust and differentiation
Figure 25: Attitudes towards and usage of selected brands, February 2020
AA’s dominance in breakdown recovery is reflected in awareness and usage
Figure 26: Key metrics for selected brands, February 2020
AA and Aviva more closely associated with rewarding loyalty
Figure 27: Attitudes, by brand, February 2020
Churchill and Direct Line stand out as fun brands
Figure 28: Brand personality – macro image, February 2020
Ageas struggles to stand out on positive attributes
Figure 29: Brand personality – micro image, February 2020
Brand analysis
Aviva’s loyalty strategy appears to be working
Direct Line and Churchill stand out through their strong reputations and fun image
Negative perceptions about Ageas’s accessibility and affordability
THE CONSUMER – WHAT YOU NEED TO KNOW
Rising car insurance penetration
People prefer to remain with their existing provider
Smartphones and tablets are niche channels when managing a policy
Price and quality are the key purchasing factors
A protected no claims bonus stands out as the most important feature
Policy-related actions are most popular when saving on car insurance
The majority enjoy looking for a good deal
CAR INSURANCE OWNERSHIP
Car insurance ownership grows
Figure 30: Car insurance ownership, 2017, 2018 & 2019, November 2019
Comprehensive car insurance accounts for the vast majority of policies
Figure 31: Car insurance ownership, insurance holders only (rebase), November 2019
One fifth of younger millennials own third party cover
Figure 32: Car insurance ownership, insurance holders only (rebase), by generation, November 2019
RENEWAL AND ARRANGEMENT BEHAVIOUR
40% stayed with existing provider after shopping around
Figure 33: Behaviour at last car insurance policy renewal or arrangement, November 2019
Younger customers are less likely to shop around
Figure 34: Behaviour at last car insurance policy renewal or arrangement, by generation, November 2019
PREFERRED METHODS OF INTERACTING WITH INSURERS
Smartphones and tablets remain niche channels for most customers
Figure 35: Preferred methods of interacting with insurers, November 2019
Recent switchers prefer online channels
Figure 36: Preferred methods of interacting with insurers when renewing/taking out a policy, by renewal behaviour, November 2019
MOTOR INSURANCE PURCHASE DRIVERS
Price and quality the key drivers when choosing motor insurance
Convenience and innovation matter more for newer drivers
Figure 37: Motor insurance purchase drivers, November 2019
Loyal customers look for more than just price
Figure 38: Motor insurance purchase drivers, by behaviour at last car insurance renewal, November 2019
IMPORTANT POLICY FEATURES
A protected no claims bonus is by far the most policy important feature
30% would prioritise a fair premium commitment
Figure 39: Most important policy features, November 2019
A singular focus on price can come at the cost of other benefits
Figure 40: Most important policy features, by motor insurance purchase drivers, November 2019
POTENTIAL ACTIONS TO REDUCE THE COST OF MOTOR INSURANCE
Policy related actions are the most popular …
… while younger drivers consider alternative methods
Figure 41: Actions taken to reduce the cost of car insurance, November 2019
Reluctant switchers are less likely to take action to save
Figure 42: Actions taken to reduce the cost of car insurance, by renewal behaviour, November 2019
ATTITUDES TOWARDS MOTOR INSURANCE
Trying to find a good deal is an enjoyable pursuit
Consumers are keen on rewards for driving an electric car
Figure 43: Attitudes towards car insurance, November 2019
Policyholders are looking for reasons to stay loyal
Figure 44: Attitudes towards car insurance, by renewal behaviour, November 2019
Insurance apps hold most appeal for working parents
Figure 45: Motor Insurance – CHAID – Tree output, November 2019
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
CHAID analysis methodology
Figure 46: Motor Insurance – CHAID – Table output, November 2019
APPENDIX – MARKET SIZE AND FORECAST
Figure 47: Best and worst-case forecast for the value of gross written premiums for personal motor insurance (UK business only), 2019-2023
Forecast methodology

 

Success Stories

Our Clients

Tell Us What You Need and We’ll Get Back with the Best Solutions Available.

*
*
*

get in touch

Location :

State Tower, 90 State Street, Suite 700, Albany NY - 12207, United States

Call Us :

US/Canada toll free : 866-997-4948

Tel : +1-518-621-2074