Impact of Inflation on United Kingdom (UK) Personal Lines Insurance Market
Description
Impact of Inflation on United Kingdom (UK) Personal Lines Insurance Market
Summary
This report provides an overview of some of the leading macroeconomic trends driving inflation in the UK economy, as well as those set to affect future inflation and GDP growth rates in 2023 and beyond. It analyzes how insurance consumer behavior has changed in the past 12 months and how it will continue to change in the future, with specific analysis of the motor, household, pet, and travel insurance sectors. The report also looks at the UK economy heading into 2023 and how insurers can be best prepared to deal with the trials and tribulations the coming years may bring.
In October 2022, the inflation rate in the UK was 11.1%. This rapid rate of price increases is causing huge strain on businesses’ and consumers’ finances, leading to a cost-of-living crisis in the UK. GlobalData’s Q3 2022 Consumer Survey suggests that over 85% of consumers are worried, to some extent, about their current financial situation. Many factors have coalesced in creating this economic situation, including global issues such as the COVID-19 pandemic and related supply-chain problems as well as domestic issues such as Brexit and economic mismanagement. Across all four of the primary personal lines of business (motor, home, pet, and travel), consumers have canceled policies, with more considering taking such action. Other consumers are looking to adjust their policies - either cover levels, excess, or both - while others have looked to switch provider in search of better value for money.
Scope
Summary
This report provides an overview of some of the leading macroeconomic trends driving inflation in the UK economy, as well as those set to affect future inflation and GDP growth rates in 2023 and beyond. It analyzes how insurance consumer behavior has changed in the past 12 months and how it will continue to change in the future, with specific analysis of the motor, household, pet, and travel insurance sectors. The report also looks at the UK economy heading into 2023 and how insurers can be best prepared to deal with the trials and tribulations the coming years may bring.
In October 2022, the inflation rate in the UK was 11.1%. This rapid rate of price increases is causing huge strain on businesses’ and consumers’ finances, leading to a cost-of-living crisis in the UK. GlobalData’s Q3 2022 Consumer Survey suggests that over 85% of consumers are worried, to some extent, about their current financial situation. Many factors have coalesced in creating this economic situation, including global issues such as the COVID-19 pandemic and related supply-chain problems as well as domestic issues such as Brexit and economic mismanagement. Across all four of the primary personal lines of business (motor, home, pet, and travel), consumers have canceled policies, with more considering taking such action. Other consumers are looking to adjust their policies - either cover levels, excess, or both - while others have looked to switch provider in search of better value for money.
Scope
- 85.3% of UK consumers are, to some extent, concerned about their current financial situation, according to insights from GlobalData’s Q3 2022 Consumer Survey.
- Over 40% of former consumers in the home, pet, and travel lines indicated that they canceled their policy as a cost-cutting measure due to the cost-of-living crisis.
- A further two in five current policyholders in the pet and travel lines indicated they have considered switching or canceling their policy, with over one in five consumers in the home and motor lines indicating similar.
- Understand the extent and underlying drivers of inflation and the subsequent economic downturn facing the UK economy.
- Discover why consumers are canceling their insurance policies and how to reduce these actions.
- See how and why consumers are adjusting their policies and switching their providers in 2022.
- Determine the effects of inflation on premium prices and changes in demand for policies.
- Ascertain how long-term trends in consumer behavior may be affected by the economic situation in the UK.
Table of Contents
42 Pages
- Market overview
- Key findings
- Critical success factors
- Inflation indicators have been rising for two years
- Macroeconomic trends
- Consumers are highly concerned about inflation
- Cost-cutting and home working are driving cancellations
- Consumers are also looking to make policy adjustments
- Shopping is more frequent, but switching is more difficult
- Motor premiums have risen rapidly in the year
- Home premiums and policies written have fallen in 2022
- The UK is forecast to enter recession by Q4 2022
- Longer-term changes to behavior and insurance
- Technology can mitigate the future impact of inflation
- Abbreviations and acronyms
- Methodology
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
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