UK Household Insurance: Market Dynamics and Opportunities 2024
Summary
This report analyzes the UK household insurance market, looking at drivers of uptake across different demographics and dwelling types. The report discusses the claims landscape in 2023 as well as the housing market and upcoming regulatory changes within insurance. Incumbent competitors are analyzed and compared, as are newcomers and insurtechs within the space. Future impactors in the market, including climate change and smart home devices, are also covered.
GlobalData anticipates that gross written premiums (GWP) in the household insurance sector will rise by 5.8% by the end of 2024, building on an 8.7% increase to GBP7.07 billion in 2023. GlobalData forecasts that GWP will continue to grow in 2024, driven by an increase in premium rates rising. Growth in 2023 was largely driven by an 11.6% rise in the average premium price across all three products. Specifically, premiums for combined, buildings-only, and contents-only insurance policies increased by 12.9%, 14.9%, and 7.1%, respectively, in 2023. However, it is crucial to note that the cost-of-living crisis/inflation continued to exert considerable pressure on consumers, resulting in 17.9% opting to cancel their policies. The housing market faced challenges due to high interest rates and inflation, leading to a decline in mortgage approvals in 2023.
Scope
- The UK household insurance market is expected to rise by 5.8% in 2024, following an 8.7% increase in 2023.
- The average premium prices for combined, buildings-, and contents-only insurance increased by 12.9%, 14.9%, and 7.1%, respectively, in 2023. Furthermore, the number of policies for all products fell due to financial constraints for consumers.
- Generation Rent remains an untapped demographic as roughly half have contents-only insurance in place.
- Identify underlying drivers of demand and premium prices for home insurance products.
- Examine the nature of the claims landscape in 2023.
- Compare the performances of market leaders throughout the year.
- Determine how insurtechs are attempting to gain traction in the market.
- Understand the progression of home insurance lines into the future.
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Market Dynamics
- The UK household insurance market grew in 2023 and is expected to keep expanding in 2024
- Table Figure 1: UK household insurance market GWP soared by 8.7% in 2023
- Table Household insurance GWP, annual growth rate, 2019–23
- Table Figure 2: Home insurance premiums have been on the rise since the large dip in Q1 2022
- Table Yearly and quarterly average household insurance premium rate movements, Q1 2019–Q2 2024
- Table Figure 3: Combined insurance made up 83.2% of total home insurance GWP in 2023
- Table Figure 4: Roughly 40% of all renters have a home insurance product in place
- Table Percentage of respondents holding any form of home insurance, 2022–23
- Table Figure 5: The share of UK renters stagnated in 2023
- Table Figure 6: Many have not purchased home insurance as it is too expensive
- Table Figure 7: Uptake of contents-only insurance has fallen, whereas a quarter of renters have the wrong insurance
- Policies and regulations set by the government regarding home insurance
- The claims landscape in 2023
- Table Figure 8: The overall cost of claims incurred grew by 5.3% in 2023
- Table Figure 9: The number of claims notified decreased by 13.9% in 2023
- Table Household gross claims incurred, and number of claims notified, by type, 2019–23
- Table Figure 10: Rebuild costs are growing at a slower pace in 2024
- Table Figure 11: Consumers are reluctant to change their level of cover amid the cost-of-living crisis
- The housing market experiences a significant downturn due to changes in building regulation
- Table Figure 12: New home registrations and completions drop in 2023, with a large decrease in registrations
- Table New home registrations and completions, 2019–23
- Table Figure 13: Mortgage approvals on an upward trend since July 2023
- Table Figure 14: Younger consumers are more likely to be renting due to difficulties getting on the property ladder
- The UK household insurance market grew in 2023 and is expected to keep expanding in 2024
- Competitor Dynamics
- Aviva strengthens its position as the leading home insurance provider in 2023
- Table Figure 15: Aviva maintains its position as the leader in the household insurance market
- Table Top 10 UK household insurers by GWP and market share, 2021–23
- Insurtech innovations and recent updates
- Aviva strengthens its position as the leading home insurance provider in 2023
- The Market Going Forward
- The market is anticipated to grow until 2028f
- Table Figure 16: Premiums in the household insurance market are expected to have grown in 2024f
- Table UK household insurance market forecasts, 2023–28
- The role of smart home devices in home insurance
- Table Figure 17: Younger consumers are far more likely to be willing to share smart home data with their insurer
- Table Figure 18: The uptake of smart home devices in the UK, 2023
- Barriers exist for new alternative entrants
- Table Figure 19: Big Tech firms hold a strong position of trust among consumers if they were to sell home insurance
- Extreme weather events will continue to impact claims
- The market is anticipated to grow until 2028f
- Appendix
- Abbreviations and acronyms
- Methodology
- Table Figure 20: Forecasting methodology
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
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