Global and UK Household Insurance: Market Dynamics and Opportunities 2017

"The Report UK Household Insurance: Market Dynamics and Opportunities 2017 provides information on pricing, market analysis, shares, forecast, and company profiles for key industry participants. - MarketResearchReports.biz"

About Household Insurance Market

Geographically, the report has shed light upon different regional markets for “UK Household Insurance: Market Dynamics and Opportunities“. The faster-growing and leading segments operational in the market have been expansively researched based on various important factors. Participants could engage this information to expand their business across the world or focus on one or more regional markets that could exhibit a stronger growth in the near future. Factors such as revenue and percentage share have been carefully estimated based on the data from reliable sources.

"UK Household Insurance: Market Dynamics and Opportunities 2017", report provides an in-depth analysis of the UK household insurance market. It looks at market size and performance ratios as well as changes in premiums, claims, contextual and economic factors, regulation, and opportunities. It provides a thorough overview of the market along with future forecasts and analysis of emerging technologies and products.


High levels of competition and capacity within the household insurance space continue to shape soft market conditions, with little change in rate being achieved apart from pushing through new insurance premium tax (IPT) increases. Despite this and the new Flood Re levy introduced in 2016, profitability has been maintained due to relatively benign weather conditions.

Scope

- UK household insurance gross written premium (GWP) contracted by 1.4% in 2016.
- Overall claims performance over the last five years tells a positive story, with the number of claims falling year on year between 2012 and 2016, achieving a negative CAGR of 11.4%.
- The rise of Generation Rent presents a shifting landscape that is dampening overall market growth, and is presenting home insurers with a customer demographic that has different needs and preferences not necessarily catered to effectively by current services.
- The next couple of years should see a shift in the development of smart home insurance, and it is therefore imperative insurers keep on top of this.
- With the Flood Re levy set each year and new regulations around pricing transparency, insurers need to ensure their pricing strategies are in line with the risks they face.


Reasons to buy

- Benchmark yourself against the rest of the market.
- Ensure you remain competitive as new innovations and insurance models begin to enter the market.
- Be prepared for how regulation will impact the household insurance market over the next few years.

Table of Contents

EXECUTIVE SUMMARY 1
1.1. Market summary 1
1.2. Key findings 1
1.3. Critical success factors 1
2. MARKET CONTEXT 7
2.1. Introduction 7
2.2. Soft market conditions shaped 2016 7
2.2.1. UK household insurance GWP fell by 1.4% in 2016 7
2.2.2. High competition has kept rates low in the main product category 8
2.2.3. The requirement to notify customers of the previous years premium is expected to encourage shopping around 12
2.2.4. Combined cover is still the dominant product 12
2.3. Profitability is being challenged by claims and inflation 13
2.3.1. Claims costs fell in 2016 but average claims costs are increasing in areas 13
2.3.2. Claims inflation is challenging profitability 16
2.3.3. Underwriting profitability increased to a five-year high 18
2.3.4. Flood Re affected results in 2016 19
2.4. Home insurance demand remained constant, but underlying dynamics are shifting 20
2.4.1. New home registrations and completions contracted slightly in 2016, although numbers remain well below requirements 20
2.4.2. Mortgage approval rates in 2016 remained level with 2015, but have fallen in 2017 22
2.4.3. The rise of Generation Rent presents a shifting landscape 23
2.4.4. Penetration rates are high among owner-occupiers, but lower for tenants 24


3. COMPETITOR DYNAMICS 26
3.1. The top 10 insurers account for 72% of GWP 26
3.1.1. Direct Line Group leads the household insurance market 26
3.1.2. Lloyds Banking Group is losing ground due to soft market conditions 27
3.1.3. Aviva is evolving its proposition using technology 27
3.1.4. Ageas is looking beyond the traditional policy to target millennials 28
3.1.5. Allianz and LV= link up 28
3.2. Technology is facilitating new entrants 29
3.2.1. Neos aims to bring home insurance into the digital world 29
3.2.2. UK insurers are watching US digital insurer Lemonade 29
3.2.3. Insure-A-Thing is challenging the traditional business model 30
4. 2017 AND BEYOND 31
4.1. Introduction 31
4.2. The market is expected to grow to 6.8bn in GWP by 2021 31
4.2.1. Premium rates are unlikely to increase in the short term 31
4.2.2. Demand for home insurance will stay static as Generation Rent grows 31
4.2.3. A significant weather event will be required to shift rates 32
4.2.4. The negative economic consequences of Brexit are having an adverse effect 32
4.3. Generation Rent will drive a new set of products 34
4.3.1. Demand for propositions aimed at tenants is growing 34
4.3.2. Millennials have different priorities and lifestyles compared to previous generations 35
4.3.3. Gadget insurance is being heavily marketed towards students and millennials 35
4.3.4. Back Me Up offers cover for any three items 36
4.3.5. Trov offers a digital locker 36
4.4. The evolution towards smart home insurance has started 37
4.4.1. Water detection is the primary focus to reduce escape of water claims 37
4.4.2. Security is another risk which is getting attention from insurers and tech companies 37
4.4.3. Other devices are driving a more connected home 37
4.5. Competition from new startups and retailers is growing 39
4.5.1. New startups like Neos will continue to disrupt the market 39
4.5.2. The battle to own the customer has started 39
4.6. There are barriers and risks to overcome before we get to smart home insurance 40
4.6.1. Customers are expecting cheaper policies 40
4.6.2. Insurers are looking at the implications of the General Data Protection Regulation 41
4.6.3. Cyber risk for individuals is growing 42
5. APPENDIX 43
5.1. Abbreviations and acronyms 43
5.2. Methodology 43
5.2.1. GlobalData Financial's 2016 and 2017 UK General Insurance Consumer Surveys 43
5.3. Bibliography 44
5.4. Further reading 45




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