DUBLIN–(BUSINESS WIRE)–The “UK Insurance Consumer 2019: Consumer Research Report” has been added to ResearchAndMarkets.com’s offering.
In 2018, UK consumers are estimated to have spent around 25 billion on general insurance premiums, rising to around 26 billion in 2016. By 2023, total premiums are expected to be almost 30 billion. Virtually all consumers (92%) own at least one type of general insurance product. Insurance ownership is so high because virtually all consumers own something or do something which can or may require insurance cover: in other words, consumers have risks that need covering.
As the number of insurable risks faced rises, so insurance ownership also tends to rise, however, the relationship is not a simple linear one. In fact, insurance cover is often mismatched to the risks faced and being underinsured is the norm across all consumers. Consumers as a whole face on average 4.5 insurance risks but tend to own only 3 different types of insurance.
While, in general, as insurance ownership rises insurance cover becomes more aligned to the risks faced, most poorer and younger consumers have inappropriate levels of insurance (i.e. more likely to have more risks than insurance owned) and only the wealthier and more mature consumers have appropriate levels of insurance (i.e. more likely to have the same number of risks as types of insurance owned).
Consumers can be classified into one of three groups:
- Intrepid Buyers. Consumers who are very confident about buying the insurance and also very self-reliant. They tend to have significant insurable risks which are covered with relatively high levels of cover. These consumers find it easy to go into the market and buy insurance. Most consumers in this group want to complete part or all of their customer journey online.
- Timid Buyers. These consumers are the mirror image of Intrepid Buyers. They lack confidence when buying the insurance and want substantial support. A relatively high percentage of this group are Uninsured or selectively insured despite the fact that nearly eight-in-ten faced medium or high insurable risks. This group lacks the confidence and self-reliance to favour completing their customer journey online.
- Intermediate Buyers. As their name implies, these consumers sit between the above two groups, being more confident and self-reliant compared with Timid Buyers but less so compared with the Intrepid Buyers.
- Young, less affluent consumers (especially females) are the most likely to be Timid Buyers who require greater industry and intermediary support when buying insurance. They need to have insurance demystified and the buying and selection process made as simple as possible.
Other interesting findings contained in the report are:
- Most insurance policyholders have already made multiple journeys in the insurance market. In other words, they are not new to the market, so before they start a customer journey, their decision comes down to either renew with their current provider or switch provider
- Intrepid Buyers, who are confident and self-reliant when it comes to insurance selection and purchase, are the most likely to have switched provider to get a policy
- While Switchers and Renewers ultimately act differently along their customer journeys, a large majority of those renewing engage in switching-type actions. As such, renewing a policy involves many of the same actions as switching in terms of searching for alternative deals and haggling with providers to get a better deal but with a different final outcome (staying rather than leaving).
- Most insurance owners focus their deal-finding on price comparison websites (PCWs) and online resources in general. All policyholders, irrespective of how they acquired their last policy have a strong preference for using PCWs to find insurance deals
- Across all consumers with insurance, there is a near 50%:50% split between policyholders who when selecting an insurance policy focus first on the cover (47%) and those who focus first on price (47%), but this masks important variations by the characteristics of the policyholder.
- The knowledge of their policies that most cover holders have is top-level rather than detailed, with result that their ability to negotiate a better deal with an insurance provider is likely to be confined to broad generic features of their policies, the most obvious being price. Having more detailed information about a policy owned seems to make negotiating with an insurer easier and it tends to reduce the price focus of policyholders
Key Topics Covered:
1. Executive Summary
- Key Recommendations
- It’s a 20 billion plus industry
- Based on the fact that most consumers own some form of insurance
- Because most face risks that can be insured against
- But facing a risk does not automatically result in insurance cover
- And for most adults, insurance cover does not match the risks faced
- Buying insurance is an active choice for most
- When buying insurance consumers lack confidence
- Three types of insurance buyer
- For most customers buying insurance is a repeat action
- Switchers and Renewers, different outcome but the same action
- The journey often starts with a price comparison website (PCW)
- Consumers are split when weighing up cover vs. price
- But consumers do like to buy insurance from well-known brands
- Price may not come first, but it is always near the very top
- Lack of policy knowledge encourages a price focus
2. Introduction
3. Profile Of The Insurance Consumer
- Over nine-in-ten consumers own at least one type of general insurance policy
- Because virtually all have risks that need insuring against
- Legal and financial commitments result in motor and home-related risks being well covered
- Many consumers get their insurance bundled
- Sometimes the above insurances are not enough
- Consumer risk and insurance groups
- Insurance follows the risks, up to a point
- The age and income switchover points
4. How Consumers Approach Insurance
- Risk aversion encourages insurance ownership
- Consumers don’t feel confident when buying insurance and need help
- Young, less affluent consumers the least confident buyers
- Young, less affluent consumers also the most in need of support
- The desire to complete a customer journey online
- Confidence and Self-reliance drive online customer journeys
- The Three Types of Insurance Buyer
- Young consumers and less affluent consumers take a Timid approach to buying
5. How The Customer Journey Begins
- Most insured consumers are experienced, journey takers
- Intrepid buyers the most likely to switch
- Intrepid buyers are also the most likely to renew but for different reasons
- First Time Buyers also largely defined by age
- Renewers and Switchers: different outcome but the same approach
- And both Switchers and Renewers are spurred into action by the renewal prompt
- Price Comparison Websites start the search
- PCWs hit the nail right on the head
- So, the PCWs focus is unlikely to diminish in the near future
6. Price, Cover Or Brand
- Lack of confidence encourages consumers to default to price
- Switching is price-led
- Consumers like to be insured by well-known brands
- Agile Buyers an easier sell for major brands
- Price may not come first, but it is always near the very top
- To negotiate and to buy based on the cover, you have to know the cover you have
- And they need their information delivered in a concise manner
7. Market Size And Trends
- Consumers spend over 20 billion on general insurance
-
The Market nears the 30 billion mark in 2023
For more information about this report visit https://www.researchandmarkets.com/r/j8lfm8
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