United Kingdom (UK) Personal Lines Insurance Distribution Dynamics by Consumer Channel Preferences (Direct, Broker, Bank, Affinity and Price Comparison Webiste Channel) and Future Market, 2022 Update
This report examines consumer channel preferences in the personal lines space and how these have changed over time – including the drivers behind customers’ choices. It also forecasts the future of personal lines distribution to 2026.
The direct channel remains the most frequently used option when it comes to purchasing insurance. The channel increased its share of distribution in 2021, rising by 0.5 percentage points (pp) compared with 2020. With many insurers and distributors enhancing their online and digital capabilities in response to shifting consumer habits brought on by the COVID-19 pandemic, consumers are increasingly inclined to purchase insurance online. Price comparison websites (PCWs) are highly effective at making consumers switch insurer. The majority of consumers said they chose to buy insurance through a PCW because they had previously used it. This suggests PCWs are excellent at locating the best offers for customers. On January 1, 2022, new Financial Conduct Authority (FCA) price regulations regarding dual pricing went into effect. The ability to undercut prices in the market has decreased as a result of the new regulations, which saw PCWs’ share fall by 2.3pp compared to 2020.
What are the key channels in the UK personal lines insurance market?
The key channels in the UK personal lines insurance market are direct channel, broker channel, bank channel, affinity channel, and price comparison website channel.
Direct Channel
Consumers generally favor purchasing through the direct channel online. In 2021, the majority of UK consumers purchased their insurance online via a PC or laptop. The driving factors behind consumers choosing this channel include insurer reputation and cheaper premium prices.
Broker Channel
Unlike all other channels, the most commonly chosen method of contact and purchase within the broker channel is over the phone. Price and broker relationships are the most important factors for consumers when opting to choose this channel. Brokers work with a panel of different insurers. The market competition aspect of this allows brokers to offer competitive prices to consumers who choose this purchasing channel.
Bank Channel
In 2020, the purchase of personal insurance through banks has been driven primarily by the sale of home insurance, with many mortgage lenders benefiting from the cross-selling opportunity. This is supplemented with other benefits offered for these accounts, such as travel insurance. Despite the pandemic (and the resulting temporary branch closures in 2020), face-to-face purchases through the channel have remained relatively high.
Affinity Channel
The channel remains important for the distribution of other insurance products, including pet insurance. Online purchasing methods are very common for consumers employing this channel.
Price Comparison Website Channel
In 2021, the number of consumers using a PCW to purchase insurance increased driven by increases in usage in the motor, home, and pet lines. Despite a purely online/digital presence, app usage for PCWs remains very low. PCWs are very good at encouraging consumers to switch providers, with over half of both motor and home policyholders who used a PCW switching provider in 2021.
UK personal lines insurance market, by channels
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Who are the leading advertisers in the UK personal lines insurance market?
The leading advertisers in the UK personal lines insurance market are Gocompare.com, Direct Line, LV Group., Moneysupermarket.com, Confused.com, Saga Services, Aviva, NFU Mutual, Comparethemarket.com, and Admiral.
UK personal lines insurance market, by leading advertisers
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Market report scope
| Key channels | Direct Channel, Broker Channel, Bank Channel, Affinity Channel, and Price Comparison Website Channel |
| Leading advertisers | Gocompare.com, Direct Line, LV Group., Moneysupermarket.com, Confused.com, Saga Services, Aviva, NFU Mutual, Comparethemarket.com, and Admiral |
Scope
• The direct channel remains the most frequently used option when purchasing insurance.
• The proportion of business sold through the direct channel increased by 0.5pp in 2021 to 49.4% of total personal lines distribution.
• In 2021, the broker channel grew by 0.3pp as consumers looked to utilize brokers in search of better deals.
Reasons to Buy
• Understand how certain distribution channels in the UK general insurance market performed in 2021.
• Ascertain how underlying factors and drivers in these markets will shape them going forward.
• Discover preferred methods of purchasing through each respective distribution channel.
• Understand switching behavior in each respective distribution channel.
• Explore the future market shares in the distribution of personal lines to 2026f.
Key Players
Table of Contents
Frequently Asked Questions
The key channels in the UK personal lines insurance market are direct channel, broker channel, bank channel, affinity channel, and price comparison website channel.
The leading advertisers in the UK personal lines insurance market are Gocompare.com, Direct Line, LV Group., Moneysupermarket.com, Confused.com, Saga Services, Aviva, NFU Mutual, Comparethemarket.com, and Admiral.
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