United Kingdom (UK) Household Insurance – Distribution and Marketing 2021
The UK advertising spending on household insurance in 2020 was valued at GBP25.9 million which was a decrease of more than 40% as compared to 2019. The total advertising spend has consistently declined on a year-on-year basis since 2017. This is mainly due to the evolution of analytics and cloud-based digital platforms that have helped increase digital marketing for brokers and insurers. Direct mail accounted for the largest share among the media types used for the UK’s household insurance advertising in 2020, followed by TV, and others. Online purchasing methods through PC/laptop and smartphone/tablet dominate contents insurance purchases across all channels in 2020, while for buildings insurance, purchasing methods differ across the various channels. Aviva, Admiral, and Direct Line are some of the major insurers in the UK’s household insurance market.
Overview of the UK household insurance advertising market
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What are the market dynamics of the UK household insurance market?
According to the new regulations passed by the UK government in November 2021, all social housing accommodation in the UK is required by law to have smoke and carbon monoxide detectors installed. This is expected to drive the implementation of smart smoke and carbon monoxide detector devices in 2022 and presents an opportunity for providers to ensure greater customer rewards, such as lower premiums for houses with installed devices and giveaways of free devices with home insurance policies.
In an effort to curb global warming and the impact of greenhouse gas emissions on the environment, many countries are attempting to move towards a low-carbon economy. For example, the UK government’s renewable auction scheme in December 2021 funded low-carbon technology in addition to allowing onshore wind and solar power projects for the first time since 2015. The low-carbon transition will heavily influence insurers’ ESG strategies. Insurers such as Aviva, Admiral, and Direct Line in the UK announced their commitments to reach net-zero emissions by 2040 and 2050 over the past 12 months.
The claims inflation is expected to pick up in 2022 with limited profitability for the home insurance market, owing to supply chain and energy disruptions, workforce volatility, and high inflation levels. For instance, non-weather-related home insurance claims such as accidental damage claims have increased in 2021 over 2020. Home insurance providers will also be required to revise their pricing structures and business models to comply with the new FCA pricing regulation and maintain profitability in 2022.
Generation Rent remains a growing and untapped section of the home insurance market. Underinsurance among Generation Rent is a rising trend within the home sector. Insurtechs and startups in the sector leverage digital technology to enhance the distribution of renters’ insurance. For instance, Urban Jungle offers flexible monthly policies such as renters’ insurance that can be easily purchased online. In 2021, the FCA drew up regulations under which home and motor insurers are required to offer to renew customers a price that is no higher than they would pay as a new customer purchasing through the same sales channel. This tackles the issue of loyalty penalties, where existing customers are charged higher premiums each year at renewal. The regulatory package also requires companies to make it easier for consumers to cancel automatic policy renewals. The FCA estimates that these new measures, effective from January 2022, will save consumers over GBP4 billion over the next 10 years.
What are the key categories of the UK household insurance advertising market?
The UK household insurance advertising market is categorized by media type into TV, direct mail, digital, press, and others. Direct mail accounted for the largest share among the media types used for the UK’s household insurance advertising in 2020, followed by TV, others, digital, and press. LV= was the largest spender amongst the UK’s household insurance advertisers in H1 2021, followed by Saga, and John Lewis.
Notably, the overall advertising spending trend has increased in H1 2021 compared to H1 2020 among the top 10 advertisers. A marginal decline in advertising expenditure was witnessed only from Saga. The new entrants in the top 10 advertisers list for H1 2021 include Cooperative Insurance, Compare the Market, John Lewis, More Than, and Lloyds Bank.
UK household insurance advertising market, by key categories
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Which are the major insurers in the UK household insurance market?
Aviva is the top insurance provider across all three home insurance product lines (contents, buildings, and combined) in 2021, followed by Admiral for contents and buildings, and Direct Line for combined. Aviva’s dominant share reflects its financial strength in core markets with a focus on environmental, social, and governance (ESG) investments, enhanced customer service with multi-channel distribution through MyAviva, and PCWs. Policy Expert replaced more than in the top 10 combined insurance providers in 2021. Halifax features across contents and combined insurance products, while Barclays was among the top 10 for contents and buildings. This suggests that providers can further explore cross-selling opportunities alongside their mortgages.
UK household insurance market, by key companies
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Market report scope
| Market size (year – 2020) | GBP25.9 million |
| Key categories | TV, direct mail, digital, press, and others |
| Key channels | Affinity, bank, broker, insurer, and PCW |
| Key companies | Aviva, Admiral, Direct Line, and AXA/AXA Assistance |
Scope
- Aviva is the top provider among consumers across all three home insurance products – buildings, contents, and combined insurance.
- Visiting a PCW is the most popular pre-purchase activity, with over 52% of combined customers doing so. This prominence has increased from 2020, highlighting how crucial price is as a factor in the decision-making process.
- Purchases of household insurance policies through a PC/laptop accounted for more than half of all purchases.
- Claims inflation is expected to continue posing challenges for the home insurance market, owing to supply chain and energy disruptions, workforce volatility, and high inflation levels.
Reasons to Buy
- Understand consumer purchasing decisions and how these will influence the market over the next few years.
- Improve customer engagement by recognizing what is most important to them and how insurers can adapt their products and services to meet their needs.
- Compare the net promoter scores of key insurance providers.
- Discover which providers lead the way in the household insurance space and learn about new product innovations.
- Adapt your distribution strategy to ensure it still meets customer purchasing behavior.
Key Players
Table of Contents
Frequently Asked Questions
The UK advertising spending on household insurance in 2020 was valued at GBP25.9 million.
The UK household insurance market channels of purchase include affinity, bank, broker, insurer, and PCW.
The UK household insurance advertising market is categorized by media type into TV, direct mail, digital, press, and others.
Aviva is the top insurance provider across all three home insurance product lines (contents, buildings, and combined), followed by Admiral for contents and buildings, and direct line for combined.
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