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Motor Insurance - UK - March 2019

Motor Insurance - UK - March 2019

“The expected revision of the personal injury discount rate to a more insurer-friendly level will allow providers to ramp up price competition. This is crucial as consumers remain price-sensitive, despite a preference for high-level cover. However, some upward pressure on prices will remain, as the cost of car repair claims hit record levels in 2018.”

– Rich Shepherd, Senior Financial Services Research Analyst

This report looks at the following areas:

Drivers have good intentions to buy high-level cover, but cost is key
The market is congested but has room for a truly different provider
Impressive levels of satisfaction can be problematic


OVERVIEW
What you need to know
Scope of this Report
EXECUTIVE SUMMARY
The market
Figure 1: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2013-23
Companies and brands
Figure 2: Leading personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2016 and 2017 (UK business only)
Figure 3: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2014-18
Figure 4: Attitudes towards and usage of selected brands, January 2019
The consumer
Figure 5: Car insurance ownership, insurance holders only (rebase), November 2018
Figure 6: Current car insurance provider, November 2018
Figure 7: Behaviour at last car insurance policy renewal, rebase, November 2018
Figure 8: Reasons for not shopping around at last car insurance renewal, November 2018
Figure 9: Factors affecting choice of car insurance policy, November 2018
Figure 10: Satisfaction with current car insurance policy, November 2018
Figure 11: Attitudes towards car insurance, November 2018
What we think
ISSUES & INSIGHTS
Drivers have good intentions to buy high-level cover, but cost is key
The market is congested but has room for a truly different provider
Impressive levels of satisfaction can be problematic
THE MARKET
What You Need to Know
Premiums remained at record levels in 2018…
…but new car sales slumped
Claims costs reach a record £8.6 billion
Civil Liability Act becomes law
Market Size and Forecast
Premium growth flattened in 2018
Figure 12: Gross written personal motor insurance premiums (UK domestic business only), 2014-18
Premiums expected to rise slowly and unevenly
Figure 13: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), 2013-23
Forecast methodology
Figure 14: Forecast of the value of gross written personal motor insurance premiums (UK domestic business only), at current and constant prices, 2013-23
Market Environment
Car parc growth halved in 2018…
Figure 15: Number of licensed cars, Great Britain, 2010-18
…but car ownership remains consistent
Figure 16: Car ownership, November 2018
New car sales fell by 7%
Figure 17: Number of new car registrations, 2012-18
Premiums fell slightly in 2018
Figure 18: Average premium for comprehensive car insurance policies, annual data, 2014-18
Figure 19: Average premium for comprehensive car insurance policies, quarterly data, Q1 2014-Q4 2018
The cost of claims reached a record high in 2018
Figure 20: Volume and gross value of private car claims settled, 2013-18
Regulatory and Legislative Changes
Civil Liability Act becomes law
Brexit questions still to be answered
Consultation launched into autonomous cars
FCA investigating general insurance pricing
COMPANIES AND BRANDS
What You Need to Know
Direct Line is the UK’s largest personal motor insurer
Aviva looks to innovation to stay near the top
Insurers are innovating to reflect changing driving habits
Confused.com remains the biggest car insurance advertiser
Insurers struggle for differentiation
Market Share
Direct Line is the UK’s largest personal motor insurer
Admiral continues to grow
Figure 21: Top 20 domestic motor insurance underwriters – UK, by share of total market GWP – ABI members only, 2017
Aviva looks to innovation to stay near the top
Hastings enjoyed impressive growth in 2017
Figure 22: Leading personal motor insurance underwriters (UK-domiciled), by gross written premiums, 2016 and 2017 (UK business only)..30
Launch Activity and Innovation
Catering for changing driving habits
Preparing for automated cars
AXA signs up to provide car insurance through InsurTech app Brolly
CarFinance 247 to move into the insurance space
Advertising and Marketing Activity
Adspend topped £100 million despite annual drop
Figure 23: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle
insurance and van insurance, 2014-18
Confused.com remains the biggest advertiser, ahead of Direct Line
Figure 24: Top 10 spenders of above-the-line, online display and direct mail advertising on car insurance, breakdown recovery, motorcycle insurance and van insurance, 2016-18
TV is the primary advertising channel
Figure 25: Total above-the-line, online display and direct mail advertising expenditure on car insurance, breakdown recovery, motorcycle insurance and van insurance, by media type, 2018
Nielsen Ad Intel coverage
Brand Research
Brand map
Figure 26: Attitudes towards and usage of selected brands, January 2019
Key brand metrics
Figure 27: Key metrics for selected brands, January 2019
Figure 28: Attitudes, by brand, January 2019
Figure 29: Brand personality – macro image, January 2019
Figure 30: Brand personality – micro image, January 2019
Brand analysis
THE CONSUMER
What You Need to Know
Comprehensive policies dominate the market
General insurers’ heritage puts them out in front
A third of drivers switched at their last renewal
Satisfaction with renewal quotes is the biggest barrier to shopping around
Price is the key driver in product choice
Insurers achieve impressive levels of satisfaction
There is still work to be done on improving transparency
Car Insurance Ownership
Comprehensive policies dominate the market
Figure 31: Car insurance ownership, November 2018
Figure 32: Car insurance ownership, insurance holders only (rebase), November 2018
Under-25s more likely to choose third-party cover than telematics
Figure 33: Car insurance ownership, insurance holders only (rebase), by age, November 2018
Car Insurance Providers
General insurers’ heritage puts them out in front
Figure 34: Current car insurance provider, November 2018
The AA is particularly successful at attracting younger drivers
Figure 35: Type of current car insurance provider, by age, November 2018
Renewal and Arrangement Behaviour
A third of drivers switched at their last renewal
Figure 36: Behaviour at last car insurance policy renewal or arrangement, November 2018
Figure 37: Behaviour at last car insurance policy renewal, rebase, November 2018
Shopping around is accepted as the done thing…
Figure 38: Likelihood to shop around at next car insurance renewal, November 2018
…but vulnerable consumers are most at risk of missing the best deals
Figure 39: Likelihood to shop around at next car insurance renewal, by household financial situation, November 2018
Barriers to Shopping Around at Renewal
62% who didn’t shop around didn’t see a need to
Figure 40: Reasons for not shopping around at last car insurance renewal, November 2018
Younger drivers are more apathetic, over-45s have more valuable relationships
Figure 41: Selected reasons for not shopping around at last car insurance renewal, by age, November 2018
Factors Affecting Choice of Policy
Price is the key driver in product choice
Figure 42: Factors affecting choice of car insurance policy, November 2018
Just 17% got the highest-level cover they could afford
Reputational factors matter to those who can afford to consider them
Figure 43: Selected factors affecting choice of car insurance policy, by household financial situation, November 2018
Satisfaction with Car Insurance
Insurers achieve impressive levels of satisfaction
Figure 44: Satisfaction with current car insurance policy, November 2018
Attitudes towards Car Insurance
Drivers’ desire for high-level cover clashes with demand for low prices
Figure 45: Attitudes towards car insurance, November 2018
Trust and differentiation are in short supply
There is still work to be done on improving transparency
APPENDIX
Data Sources, Abbreviations and Supporting Information
Abbreviations
Consumer research methodology
Market Size and Forecast
Figure 46: Best- and worst-case forecast for the value of gross written premiums for personal motor insurance (UK business only), 2018-23
Forecast methodology
RESEARCH METHODOLOGY
UK Research Methodology
Sampling and weighting
Brand & Social Media Research
Trade research
Desk research
Statistical Forecasting
The Mintel fan chart

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