Uk Private Motor Insurance 2010 Now Available At Reportsandreports
Dallas, TX: ReportsandReports announce Japanese UK Private Motor Insurance 2010 Market Research Report in its Store.
Browse complete Report at http://www.reportsandreports.com/market-reports/uk-private-motor-insurance-2010/
The report analyzes the UK private motor insurance market's performance in 2006 and 2007, providing insight into competitor strategies, GWP, market share and profitability. The report also provides forecasts for the size and profitability of the private and total motor markets up to 2012.
Scope
Motor insurance distribution trends analyzed by channel and platform Analysis of the major competitive issues shaping the market, supported by interviews with senior industry executives and data from secondary sources Detailed market forecasts based on Datamonitor's in-house model and expertise
Highlights
Premium income from private non-comprehensive policies decreased due to consumers shifting away from this type of cover, as non-comprehensive premium rates rose on average over the year. Consumers have found it much easier in recent years to obtain comprehensive coverage and so have naturally opted for the better cover. Around two-thirds of consumers arranged their motor insurance over the telephone in 2007, making it the largest distribution platform. However, use of the telephone as a means to arrange a policy has been declining steadily year-on-year since 2003. The market dominance of the largest players is expected to confer a greater control over the setting of premium rates and a greater ability to steer the market. This has been evident in the fact that the current underwriting cycle has turned before the market reached the level of losses seen in previous cycles.
Reasons to Purchase
Understand what motivates consumers to buy motor insurance and which consumers are most likely to switch provider at renewal Benchmark your company against your competitors based on current and past performance in the market Develop your future business plans from an informed viewpoint with Datamonitor's market forecasts under three different scenarios.
Table Of Contents
Overview
Catalyst
Summary
Executive Summary
The UK private motor insurance market started to harden at the end of 2006
Private motor insurance GWP contracted by 0.9% in 2006 as the market only hardened late in the year
Underwriting losses expanded in 2006, driven by high costs and lower net revenue
Distribution of personal lines insurance shifted towards partnerships with banks and brands in 2006
The partnership channel gained market share from brokers in the motor insurance market in 2006
The telephone remained the largest platform for arranging a motor policy in 2007 but the internet platform is growing fast
Conditions remained competitive in 2006, leading some to exit the market
The competitive nature of the private motor market caused some insurers to exit the market
Market leader RBSI maintained its grip on the private motor market in 2006
The market is forecast to reach 12.5 billion by 2012 and regain profitability in 2009
The UK private motor insurance market is forecast to be worth 12.5 billion in 2012
The private motor insurance market is forecast to reach profitability in 2009
Table of Contents
Table of figures
Table of tables
Market Context
Introduction
The UK private motor insurance market started to harden at the end of 2006 and grew in 2007
The market hardened late in 2006, which led to strong gains in premium income for 2007
UK private motor insurance GWP increased to an estimated 10.1 billion in 2007 as the market hardened
Private motor insurance GWP contracted by 0.9% in 2006 as the market only hardened late in the year
The comprehensive and non-comprehensive segments both declined in 2006, but rebounded in 2007
Comprehensive motor GWP suffered the worst contraction of the three private lines in 2006
Non-comprehensive premium income suffered as fewer motorists chose this cover
The motorcycle market was the only part of private motor to increase in 2006, although it contracted in 2007
Late rises in premium rates and low growth in private car numbers depressed GWP in 2006
Private motor insurance premium rates recovered late in 2006 and have climbed in 2007
Comprehensive premium rates grew towards the end of 2006 and continued to increase in 2007
Non-comprehensive premium rates increased significantly in 2006, but trailed the comprehensive market in 2007
The UK private vehicle parc continued to grow slowly in 2006
Private car numbers increased in 2006, although the rate of growth has slowed
New registrations for private cars declined in 2006
Although the private car parc is aging it remains mostly modern in composition
Motorcycle numbers continue to climb, although growth has slowed
Underwriting losses expanded in 2006, driven by high costs and lower net revenue
The private motor underwriting result deteriorated in 2006
Increases in total outgoings were driven by higher commissions and reserving, despite lower claims costs
Commissions and expenses rose 3.1% in 2006, while insurers reserved more than they released
Net claims costs fell in 2006, moderating the increase in total outgoings
Claims inflation continue to plague the market, but accident and theft rates have fallen
Overall claims inflation increased significantly in 2006
Bodily injury claims are more expensive than other claims
Falling road traffic accident rates will have given insurers some respite on their claims bills
Road traffic accident numbers have declined over the last nine years
Road traffic accidents have declined even as car numbers have increased, representing a fall in frequency
Casualty rates have fallen steadily, mirroring the decline in road traffic accidents in 2006
Theft rates continue to fall, representing a positive trend for private motor insurers
A number of initiatives aimed at cost savings were undertaken in 2006 and 2007
The IFB has been very active in the investigation of professional fraud over the year it has been in operation
The tightening up of MID requirements should drive down uninsured driving leading to savings for insurers
Insurers remain divided over whether rehabilitation offers real savings on claims costs
With the arrival of Copart, recycled parts can assist insurers in curbing repair costs
Insurers have pushed online distribution of motor insurance certificates and could save up to 11m a year
Commercial motor GWP declined in 2006, but the market increased its underwriting profit
The commercial motor market contracted slightly more than the private market in 2006
The total motor market's underwriting loss increased marginally to 204m in 2006
Despite being in a soft market, commercial motor improved its profitability in 2006
Customer Focus
Introduction
Distribution of personal lines insurance shifted towards partnerships with banks and brands in 2006
The partnership channel gained market share from brokers in the motor insurance market in 2006
Aggregators have become important to motor insurance distribution
The telephone remained the largest platform for arranging a motor policy in 2007 but the internet platform is growing fast
The telephone and face-to-face platforms have been declining steadily
More consumers are turning to the internet to arrange their motor policies
Retention rates vary by age of consumer and platform used to arrange insurance
The majority of motor consumers will stay with the same provider at the time of renewal
More than a third of consumers who purchased their motor insurance online switched provider at renewal
Consumers purchasing their motor policies face-to-face, by phone or via post are unlikely to change provider
Switching providers is more prevalent among younger consumers
Price remained the main reason for taking out a motor policy across platforms and ages
Consumers purchasing a policy via the internet are more likely to be motivated by cheaper quotes than others
Consumers over the age of 55 are less sensitive to price than younger consumers
The way in which consumers seek information about motor insurance varies relative to age
Previous experience is the most popular source of information and is used more as a consumer gets older
Younger consumers are more likely to use web sources
Television advertisements are used by 14% of consumers overall
Mailshots, brochures and broker advice are mainly used by older people
Advertising for motor insurance products remained dominated by the television campaigns of direct insurers in 2006
Motor insurance advertising increased by 2.3% in 2006 to almost 200 million
Advertising is dominated by insurers, but brokers narrowed the gap in 2006
Most of the top 10 motor advertisers in 2006 are direct insurers
The spend of the top 10 grew slightly in 2006, driven mainly by the substantial increases of four motor insurance advertisers
The top 10 motor advertisers focus on television advertising, reflecting the need for direct insurers in particular to build up brand awareness
Most of the largest motor advertisers spent the majority of their budgets on television advertising in 2006
Direct mail advertising is used by most of the top 10 to complement their television campaigns
Press, outdoor and radio advertising were used sparingly by the top 10 motor insurance advertisers in 2006
The smaller advertising budgets of advertisers ranked 11-20 were more evenly split between television and direct mail
The list of advertisers ranked 11-20 contains a more varied mix of providers
Direct mail was the most favored medium among advertisers ranked 11-20
Television advertising was also very important to competitors ranked 11-20 in 2006
Advertisers ranked 11-20 spent smaller amounts on marketing in radio, the press and outdoor
Television remains the most important medium for motor insurance providers
Direct mail remains an important advertising medium, having increased as a proportion of motor insurers budgets
Direct Line remains the leader in brand awareness in 2007
Competitive Dynamics
Introduction
Two insurers exited the private motor market in 2006 and 2007
Provident sold its motor book to GMAC in May 2007
Legal & General ceased underwriting new private motor policies in 2006
The top 10 private motor insurers lost market share in 2006, although the market remained highly consolidated
Market leader RBSI maintained its grip on the private motor market in 2006
The top 10 private motor insurers lost market share in 2006
A number of the largest private motor insurers grew market share in 2006, despite competitive conditions
Direct Line's GWP remained stable in 2006
Royal & SunAlliance raised its market share and increased premium income in 2006
Fortis grew its private motor insurance market share in 2006 due to an increase in policy numbers
NIG grew its presence in the motor insurance market, gaining market share and GWP in 2006
Competitive conditions resulted in some top 10 players losing market share in 2006
The market leader, Norwich Union, lost the most market share of the top 10 in 2006
Churchill lost market share in 2006 as its non-comprehensive book contracted severely
Zurich's private motor GWP declined in 2006, leading to a contraction in market share
CIS's market share contracted in 2006 due to lower premium income
Two players, UKI and esure, saw no change in market share between 2005 and 2006
esure joined the top 10 private motor insurers despite decreasing private motor premium income
UKI saw its market share increase in 2006, though premium income declined
Mid-tier private motor insurers retained market share overall in 2006
Only a few private motor insurers in the 11-20 bracket managed to increase market share in 2006
AXA's private motor book rebounded in 2006 increasing by a substantial 43.5% in GWP terms
The NFU Mutual experienced modest premium income growth in 2006
Aioi Motor & General increased market share and premium income in 2006
Five mid-tier insurers lost market share in 2006
LV's market share declined by 0.3 percentage points in 2006 as it allowed premium income to contract
Provident's book continued to contract in 2006 as it sought to exit the UK private motor market
Groupama's private motor insurance book declined in 2006
HSBC experienced a decline in its private motor account in 2006
Allianz's GWP declined by more than 10% in 2006
Two mid-tier insurers saw minor declines in premium income but maintained market share in 2006
Highway's private motor book experienced a contraction in 2006, but maintained market share
MMA's market share remained stable although GWP reduced by 3.3% in 2006
Most of the top 10 insurers write some non-comprehensive and commercial business
Comprehensive premium income dominated the books of the largest private motor insurers
Six of the top 10 private motor insurers also write commercial motor insurance
The largest private motor insurers also tend to be the largest total motor insurers
The average loss ratio among the top 10 UK motor insurance providers declined in 2006 with AXA, Norwich Union and Churchill recording the biggest improvements
In 2006, the average loss ratio of the top 10 UK motor insurers fell by 3.3 percentage points to 71.1%
AXA, Norwich Union and Churchill recorded the strongest loss ratio reductions
Four insurers recorded loss ratio deterioration
The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006, with Churchill, AXA, NIG and Royal & SunAlliance recording above-average reductions
The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006
Churchill, AXA, NIG and Royal & SunAlliance recorded above-average expense ratio decline
Norwich Union, Zurich and NFU Mutual recorded the highest increases in their expense ratios
The average combined ratio of the top 10 motor insurers fell by four percentage points in 2006, with AXA and Churchill seeing significant declines
The average combined ratio of the top 10 motor insurers declined by four percentage points in 2006
AXA and Churchill recorded significant reductions in combined ratio in 2006
NIG, Direct Line and Zurich recorded combined ratio increases
Future Decoded
Introduction
Private motor GWP is forecast to reach 12.5 billion by 2012 under neutral market conditions
A hardening market in 2008 and 2009 should result in significant premium rate growth
The UK private motor insurance market is predicted to be worth 12.5 billion in 2012
The private motor insurance market is forecast to reach profitability in 2009
Under optimal conditions the private motor market will reach 12.9 billion by 2012
Less competition could allow for greater price increases in 2008 and 2009
The market will grow by over 10% in 2008 allowing it to reach a value of 12.9 billion in 2012
With less competitive pricing the market will produce three years of profits
In the pessimistic scenario GWP will only reach 12.4 billion in 2012 as competition keeps premium inflation down in 2008
More intense competition will keep premium rate increases low according to the pessimistic scenario
The private motor insurance market will only reach a value of 12.4 billion in 2012 in the pessimistic scenario
Underwriting losses will continue throughout the forecast period in the pessimistic scenario
The total motor market, under neutral conditions, will reach a value of 16.6 billion in 2012
The total motor market is forecast to grow at 4.3% a year in the forecast period
The total market is forecast to return an underwriting profit in 2008
APPENDIX
Supplementary data
New registrations of cars and light goods vehicles by taxation class
Definitions
Premium income measures
Earned premiums
Gross Premium
Net Premium
Written premiums
Other definitions
Channel
Direct insurer/writer
Brokers
Bancassurers
Brandassurers
Platform
2005-06 definitions for line of business
Motor
Total private motor
Total commercial motor
Private motor comprehensive
Private motor non-comprehensive
Motorcycle
Fleets
Commercial vehicles (non-fleet)
Pre-2005 definitions for lines of business
Motor
Methodology
Primary and secondary research
Market size
Changes in market size information
Market size methodology
Lloyd's players and underwriting result figures
Competitor data
CIS
GWP versus GEP reporting
Home-Foreign, overseas and facultative reinsurance business
Advertising statistics
Isis MORI methodology and contacts
Sample design
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
List of Tables
Table 1: UK private motor insurance premium income, 2002-06, (m)
Table 2: Comprehensive/non-comprehensive split of the UK private car parc, 1996-2006e
Table 3: UK private motor insurance premium income by line of business 2002-07e, (m)
Table 4: Average quarterly premiums for UK comprehensive and non-comprehensive insurance, 2002-07
Table 5: Cars licensed in Great Britain by body type, 1996-2006
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