The key theme within this report is the way in which the continued growth of the direct insurers and of the direct sales channels is generally accompanied by high levels of churn and commoditisation, with policies increasingly assessed on price alone. Mintel examines ways in which insurers can try to increase customer retention and margins, while still remaining competitive in the market.

• Issues in the Market
• Key issues
• Abbreviations
• Market in Brief
• The general insurance market has seen fundamental change...
• ...led by motor insurance...
• ...and the direct writers
• Loyalty becoming a major issue...
  • Figure 1: Switching behaviour in the motor, travel and home insurance markets, January 2007
• ...as are margins
• Internal Market Environment
• Key points:
• Bank branch networks shrinking
  • Figure 2: UK branch networks, 1999 and 2006
• The growth of the bancassurers
• The emergence of direct writers
  • Figure 3: Timeline of the appearance of direct writers in the general insurance market, 1985-2005
• Advertising key for direct writers
• Retailers have also jumped onto the insurance bandwagon
• Motor premiums are starting to rise again
  • Figure 4: AA' s British Insurance Premium Index, July 1994-January 2007
• Switching activity is highest in motor insurance sector
  • Figure 5: General insurance switching activity, January 2007
• A growing pool of potential business
  • Figure 6: The number of UK households and the number of cars on the road, 1995-2006
• More consumers are opting to head overseas...
  • Figure 7: Domestic and overseas holiday volume, 2001-06
• ...with short breaks growing rapidly in popularity
  • Figure 8: Short versus long holidays, by volume, 2001-06
• Travel agents are exempt from FSA regulation...for now
• Broader Market Environment
• Key points:
• Base rate rises will put a financial strain on many households
  • Figure 9: Bank of England' s base rate, November 1990-January 2007
• More cautious consumers will be keen to save money on their insurance
  • Figure 10: PDI, consumer expenditure, savings and the savings ratio, 1991-2011
• Three in five adults have access to the Internet
  • Figure 11: British Internet penetration at home/work/place of study or elsewhere, by socio-economic group, 2001-06
• More consumers arrange general insurance online than any other financial product
  • Figure 12: Websites browsed and purchased from, by type of financial product, 2002-06
• Competitive Context
• Key points:
• To self-insure, or to play it safe?
• Uninsured drivers a growing worry...
• ...while travel insurance reaches saturation point
• Packaged accounts -- a threat, or a new outlet?
• Stripped down cover, but potentially serious implications
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Market Size and Forecast
• Key points:
• The value of the general liability sector has more than doubled
  • Figure 13: General insurance business, by annual net written premiums, 2000-05
• Motor insurers face underwriting deficit
  • Figure 14: UK motor insurance revenue account for the business and domestic market, 1993-2005
• Are changing distribution patterns to blame?
• Some insurers stepping back from the fray
• The property insurance sector recorded a profit for the second consecutive year in 2005
  • Figure 15: Breakdown of domestic property insurance underwriting result, 2000-05
• Travel sales up -- but real premiums falling
  • Figure 16: The value of the travel insurance market, number of overseas holidays and average premium per overseas visit, 2001-06
• Individual PMI subscriptions continue to dwindle
  • Figure 17: PMI subscriptions, by corporate and individual purchase, 1995-2005
• Sales of pet insurance continue to grow
  • Figure 18: Value of the pet insurance market, by GWP, 1997-2005
• Distribution Share
• Key points:
• Motor market reflects diminishing role of brokers...
  • Figure 19: Motor insurance distribution share, 1995-2006
• ...while intermediary share also fell in the home insurance market
  • Figure 20: Property insurance gross written premiums, by distribution channel, 1995-2005
• Direct sales of other insurance have more than doubled over the last decade
  • Figure 21: Other insurance distribution share, 1995-2006
• Travel insurance -- agents' market share slashed
  • Figure 22: Source used to obtain last policy, 2000-07
• Polarisation in the PMI market
• A possible resurgence for the broker channel...
• ...or continued decline?
• Companies and Products
• Key points:
• Spanning the channels
• Account aggregators expanding their scope
• Adapting products to fit new opportunities
• Insurers
• The Royal Bank of Scotland
• Aviva
• Zurich Financial Services
• Royal & SunAlliance
• Fortis
• AXA
• Other players
• Swinton
• Moneysupermarket.com
• Confused.com (Admiral Group)
• Brand Communication and Promotion
• Key points:
• High levels of adspend on general insurance
  • Figure 33: Advertising expenditure in financial services, by top five sectors, 2001/02-2005/06
• Adspend reflects high levels of customer churn
  • Figure 34: Advertising expenditure on general insurance, by sector, 2001/02-2005/06
• Home insurers take a different approach
• Travel cover goes against trend
• Online adspend is also concentrated on motor insurance
  • Figure 35: Online advertising expenditure, by sector, 2001/02-2005/06
• Direct Line is the leading advertiser of general insurance
  • Figure 36: Top ten advertisers of general insurance, 2001/02-2005/06
  • Figure 37: Advertising expenditure on general insurance, by media outlet, 2005/06
• Channels to Market
• Key points:
• Shift from brokers to direct changes consumer behaviour
• Something gained, something lost
  • Figure 38: Advantages and disadvantages of various insurance distribution platforms, 2007
• One in four drivers arrange their motor insurance policy online
  • Figure 39: Distribution platform used to arrange motor insurance, 2001-07
• Face-to-face sales play greater role in home insurance
  • Figure 40: Method of arranging most recent home contents policy, 2004-06
• Travel moves online
  • Figure 41: Channel used to arrange travel insurance, January 2007
• Private medical insurance -- signs of change
• Pushing customers online
• Channel variety key for mainstream operators
• The Consumer -- Assessing the Need For a New Distribution Balance
• Key points:
• Assessing the online population
  • Figure 49: Characteristics of Internet and broadband users, January 2007
• Juggling work -- and finances
  • Figure 50: Access to financial services, January 2007
• Direct channels key for 25-44-year-olds
  • Figure 51: Access to financial services, by gender, age and socio-economic group, January 2007
• Making time for the kids
  • Figure 52: Access to financial services, by marital status, lifestage and age of children in household, January 2007
• High earners turn to the Net
  • Figure 53: Access to financial services, by working status, gross annual household income and tenure, January 2007
• Mixing the Web and finance
  • Figure 54: Access to financial services, by region, Internet usage and daily newspaper readership, January 2007
• The Consumer -- Sales, Loyalty and Renewals
• Key points:
• Motor insurance leads the way
  • Figure 55: General insurance purchasing activity, January 2007
• Youngest consumers swapping the mouse for the phone
  • Figure 56: General insurance purchasing activity, by gender, age and socio-economic group, January 2007
• Migrating online
  • Figure 57: General insurance purchasing activity, by ACORN group and media usage, January 2007
• Third agers adjust to the new environment
  • Figure 58: General insurance purchasing activity, by marital status, lifestage, age of children and Mintel' s Special Groups, January 2007
• Online insurance sales -- a useful shortcut?
  • Figure 59: General insurance purchasing activity, by working status, tenure and TV region, January 2007
• Motor insurance and the Internet -- paying the price for churn
  • Figure 60: Renewal and switching behaviour in the motor insurance industry, by distribution channels used, January 2007
• Is home insurance following suit?
  • Figure 61: Renewal and switching behaviour in the home insurance industry, by distribution channels used, January 2007
• Travel churn reflects purchasing habits
  • Figure 62: Renewal and switching behaviour in the travel insurance industry, by distribution channels used, January 2007
• The benefits of a branch network
• Early adopters polarising the market?
• A mobile market...
  • Figure 63: Attitudes towards buying general insurance, January 2007
• ...but some loyalty still evident
• Young and thrifty...
  • Figure 64: Attitudes towards buying general insurance, by age, January 2007
• ...or just comfortable with the Net?
• The affluent looking to shift online
  • Figure 65: Attitudes towards buying general insurance, by socio-economic status, January 2007
• Heavy Internet users focus on price
  • Figure 66: Attitudes towards buying general insurance, by Internet usage, January 2007