Table of Contents
1. EXECUTIVE SUMMARY 1
1.1. The Civil Liability Bill has been delayed to April 2020 1
1.2. Key findings 1
1.3. Critical success factors 1
2. MARKET DYNAMICS 7
2.1. Introduction 7
2.2. The private motor insurance market continued to grow in 2017 7
2.2.1. The private motor market grew by
7.9% to reach £13.1bn in GWP in 2017 7
2.2.2. Non-comprehensive policies are becoming less widespread 8
2.2.3. The Lloyd’s of London market accounts for
1.3% of private motor insurance GWP 8
2.3. Motor insurance premiums have reached an all-time high 9
2.3.1. Motor insurance premiums have continued to rise 9
2.3.2. Comprehensive and non-comprehensive premiums are decreasing 10
2.3.3. IPT has remained at 12% despite concerns 13
2.3.4. The requirement to notify customers of the previous year’s premiums will encourage shopping around 13
2.4. The Ogden rate continues to increase the cost of claims 14
2.4.1. Changes to calculating the Ogden discount rate are set to benefit insurers 14
2.5. The number of motor claims notified fell in 2017 14
2.5.1. Claims notified decreased in 2017 14
2.5.2. Recorded personal injury motor claims fell by over 100,000 in 2017/18 16
2.5.3. Bodily injury claims pose the highest cost for insurers 17
2.6. Whiplash claims remain a problem 19
2.6.1. Whiplash claims were reported to fall in 2017, but remain an issue 19
2.6.2. Motor personal injury claims remain high, while RTA claims are in decline 20
2.6.3. Most RTA casualties are car occupants, but these are the least vulnerable road users 21
2.6.4. The number of pedestrian casualties increased in 2017 21
2.6.5. Car and taxi use has continued to increase 22
2.6.6. The UK motor parc continues to grow 23
3. COMPETITOR DYNAMICS 25
3.1. Direct Line and Aviva hold the largest shares of private motor 25
3.1.1. Direct Line and Aviva currently lead the private motor market 25
3.1.2. Direct Line has been the top private motor insurer for the past two years 26
3.1.3. Aviva offers standard insurance in addition to short-term, learners, and telematics policies 27
3.1.4. Ageas offers four car insurance policies, which can be purchased through brokers 28
3.1.5. LV= and Allianz are in the process of forming a joint venture 29
3.1.6. Mobile network providers are entering the telematics market 29
3.1.7. Chatbots are a new way to get a quote 30
4. THE MARKET GOING FORWARD 31
4.1. The Civil Liability Bill has been delayed to April 2020 31
4.1.1. The implementation of the Civil Liability Bill has been delayed due to Brexit 31
4.1.2. Implementation of the Civil Liability Bill could also depend on future claims trends 31
4.2. The Civil Liability Bill aims to reform personal injury motor claims 32
4.2.1. The Civil Liability Bill seeks to cut claims costs 32
4.2.2. The Civil Liability Bill would save customers £35 on motor insurance premiums 32
4.2.3. The small claims limit will increase to £5,000 for RTA claims 32
4.2.4. A tariff system is being introduced for RTA-related soft tissue injury claims 33
4.2.5. Claims will not be settled without a MedCo medical evidence report 34
4.2.6. There has been a positive reaction to the Civil Liability Bill 34
4.3. New legislation could lead to falling premiums and market GWP 35
4.3.1. The future of the private motor insurance market is uncertain 35
4.3.2. Unless claims costs fall, motor insurance and GWP will remain high 35
4.4. Telematics policies are growing in popularity 36
4.4.1. Technology will take time to penetrate the market 36
4.4.2. The number of young people learning to drive is decreasing 36
4.4.3. There are almost 1 million telematics policies in the UK, but penetration is low 37
4.4.4. Dash-cams are becoming the new telematics 37
4.4.5. Connected cars are the future of providing better insurance services, particularly claims 37
4.5. Driverless cars are expected to become mainstream by 2045 38
4.5.1. The government is supporting the development of driverless cars 38
4.5.2. Motorists with driverless cars will be required to have dual insurance policies 39
4.5.3. Autonomous car manufacturers are entering the insurance market for driverless cars 40
4.5.4. Motor insurers are looking to partner with driverless car manufacturers 40
4.5.5. Insurers could play an important role in reducing the risk of driverless cars 40
4.5.6. The 10 features for a car to be considered automated 41
4.5.7. More than half of new UK cars are sold with autonomous features 42
4.5.8. Electric cars will hold a greater share of the motor parc in the future 43
4.5.9. There will be a divided motor parc as autonomous features gain popularity 44
4.5.10. The need for personal car insurance could diminish 44
4.5.11. Smart roads will make driving safer 44
4.6. Usage-based, car sharing, and P2P policies are being launched 44
4.6.1. The majority of new, innovative policies target millennials 44
4.6.2. Motor insurers are beginning to see the opportunity in car sharing 45
4.6.3. Usage-based pay-as-you-go and pay-per-mile car insurance policies are a growing concept 46
5. APPENDIX 48
5.1. Abbreviations and acronyms 48
5.2. UK Top 20 General Insurance Competitor Analytics methodology 49
5.3. Forecasting methodology 49
5.4. Bibliography 49
5.5. Further reading 54