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UK Home Insurance Market Report 2021

  • ID: 5212350
  • Report
  • December 2020
  • Region: United Kingdom
  • 51 Pages
  • IRN Research
A £7 Billion Market

FEATURED COMPANIES

  • Admiral Group
  • Aviva
  • BGL Group
  • Covea Insurance plc
  • esure Group
  • Lloyds Banking Group

2019/20 have been turbulent years for home insurance in terms of claims, significant mergers and divestments and changed underwriting capacity. The publisher estimates that home insurance gross written premiums (GWP) will reach around £7 billion in 2020, a rise of 2% compared with 2019.


Predicting future premiums growth is very difficult at the moment given the uncertainties about when the effects of the COVID-19 pandemic will come to an end, and the pandemics final economic impact. Overall, the publisher expects to see no growth in GWP in 2021, however, growth will return after 2021.


Key factors influencing the market today are:


  • COVID-19 - This has had a range of impacts on the home insurance market. Key amongst these are more home working, which has reduced burglary and water damage claims but increased fire claims. It has also increased pressure on the finances of some families making it harder for them to afford home insurance. This has been mitigated, however, by FCA temporary measures to get insurers to offer flexibility on payments including payment deferrals. COVID-19 has also driven the adoption of IT systems by insurers, covering their internal operations and their direct to consumer distribution operations. This has accelerated the growing focus of the industry on using InsurTech to improve customer engagement and offer more competitive and tailored prices.
  • The continued rise in household numbers and the recent growth in rented accommodation
  • The impact of adverse weather events and climate change on claims (e.g. claims for flooding and escape of water), including major storms at the end of 2019 and start of 2020
  • The desire for home improvements among homeowners and modern construction techniques which are encouraging claims for escape of water and fire
  • The growing willingness of households to switch insurers to get lower premiums
  • The FCA Market pricing study, which is set to outlaw price walking, introduce enhanced product governance rules and eventually stop auto-renewal being used as a barrier to switching
  • Growing consolidation among insurers, which has seen Allianz (including LV= and Legal & General) emerge as the clear market leader.

This report looks at the domestic home/property insurance market, where home insurance is defined as insurance which covers individuals against the cost of repairing or rebuilding their home or replacing its contents. This report considers the size of the market, recent trends, the major players, forecast for the future and sets out the environmental framework in which insurance is sold today.


Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • Admiral Group
  • Aviva
  • BGL Group
  • Covea Insurance plc
  • esure Group
  • Lloyds Banking Group

EXECUTIVE SUMMARY


  • Over 600 insurers with the direct sales route the most important
  • The number of and type of households are prime market drivers
  • As are weather, crime and building techniques
  • COVID-19 a new significant market driver
  • FCA Market Pricing Study
  • Allianz the new market leader
  • A market valued at over £7 billion
  • Little growth predicted in the future

INTRODUCTION


  • Abbreviations

MARKET STRUCTURE


  • Direct route or via price comparison websites
  • Over 600 insurers
  • Two main channels to market

MARKET DEVELOPMENTS AND DRIVERS


  • Almost 30 million homes to insure
  • Eight-in-ten householders own home insurance
  • Ownership more likely if the consumer is older and a homeowner
  • Long-term change in housing tenure
  • Weather and the environment major issues
  • New building and home improvements increase risks
  • COVID-19
  • Home insurance merges into HomeTech
  • The rise of Insurer Hosted pricing
  • Flexible and On-demand home insurance
  • Financial Conduct Authority’s Market Pricing Study
  • Insurance Premium Tax hits premium costs

THE KEY PLAYERS


  • Allianz is now the clear market leader
  • Admiral Group
  • Allianz Insurance/LV/Legal and General
  • Ageas
  • Axa Insurance UK Ltd
  • Aviva
  • BGL Group
  • Co-op Group
  • Covea Insurance plc
  • Direct Line Group
  • esure Group
  • Hastings Group
  • Lloyds Banking Group
  • Markerstudy Group
  • RSA
  • Zurich

MARKET SIZE AND TRENDS


  • A turbulent period
  • Home insurance market worth over £7 billion in GWP
  • But consumers spend less than this in a given year

THE FUTURE


  • InsurTech will continue to bring innovation to the industry
  • The potential for Open Finance
  • COVID-19 will have long-term impacts…
  • As will the FCA Market Review on pricing
  • GWP predicted to rise by almost 5%

ASSOCIATIONS


List of Figures


Figure 1 Estimated volume share of new home insurance sales channelled via PCWs
Figure 2 Where the last home insurance policy was acquired from
Figure 3 Where the last home insurance policy was acquired from by type of policy
Figure 4 How the current home insurance policy was acquired
Figure 5 The estimated number of households (million) in UK (April each year), 2007-2020
Figure 6 The percentage of adults with home insurance, 2019
Figure 7 The profile of the owners of home insurance by key demographics
Figure 8 The breakdown of the housing stock in England (% of stock), 2005-2020
Figure 9 Annual rainfall, temperature and wind speed - % variations from 10-year (1981-2010) averages*
Figure 10 Household thefts (000) in England and Wales resulting in a loss, year ending March
Figure 11 Number of household theft incidents in 2020
Figure 12 Estimates shares of the home insurance market (% of gross written premiums), 2019
Figure 13 Underwriters and their distributors, August 2019
Figure 14 Underwriters and their distributors for home emergency cover, August 2019
Figure 15 The estimated size of the UK home insurance market (GWP and NWP £ billion), 2013-2020
Figure 16 Consumer expenditure on home insurance, 2010-2018
Figure 17 Estimated home insurance GWP 2019-2015


Note: Product cover images may vary from those shown

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  • Admiral Group
  • Ageas
  • Allianz Insurance/LV/Legal and General
  • Aviva
  • Axa Insurance UK Ltd
  • BGL Group
  • Co-op Group
  • Covea Insurance plc
  • Direct Line Group
  • esure Group
  • Hastings Group
  • Lloyds Banking Group
  • Markerstudy Group
  • RSA
  • Zurich
Note: Product cover images may vary from those shown