Distribution in UK Personal General Insurance 2008

Introduction

This brief analyzes the market share of the different channels through which consumers purchase their home and private motor cover and also details how consumers' household income influences their method of insurance arrangement. In addition, the brief provides insight into the marketing spend and media strategy of the top 10 insurance advertisers.

Scope

• Data and analysis on the market share of each distribution channel in home and private motor insurance.

• Information on the marketing spend and spend by media of the top 10 insurance advertisers in 2008.

Highlights

Partnerships have faired well in highly commoditized insurance lines such as private motor as consumers have become comfortable arranging their cover from providers such as retailers that do not offer the insurance expertise found in players from other channels.

The beginning of 2008 saw Direct Line launch a campaign that ran throughout the year, alerting people to the importance of quality car insurance and marking a move away from a traditionally price focused message, though later TV adverts released in August stressed a two year premium rate freeze.

Reasons to Purchase

• Understand the relative market share of each distribution channel in the home and private motor insurance markets.
• Benchmark your marketing spending against your competitors' spending and understand which rivals pose the greatest threat.

DATAMONITOR VIEW 1

• CATALYST 1
• SUMMARY 1
• ANALYSIS 2

The direct channel is the primary route to market for private motor insurers 2
The direct channel continues to be the dominant route to market for private motor insurance 2
The broker channel is the second largest distribution channel for private motor insurance 2
Corporate partnerships also play a strong role in the distribution of private motor insurance 2
Banks and building societies have a market share of 7% 2
Banks and building societies are the largest distribution channel for home insurance 4
The majority of home insurance is distributed via banks and building societies 4
Brokers accounted for an estimated 26% of home insurance premium income in 2008 4
The direct channel accounts for around a quarter of home insurance premium income 4
Around 15% of home insurance premium income is distributed via the partnerships channel 4
A number of aggregators as well as LV= entered the top 10 advertisers in 2008 6
RBSI's biggest brands, Direct Line and Churchill, were the biggest insurance advertisers in 2008 6
Three aggregators appeared in the top 10 advertisers in 2008, highlighting their importance to the market 6
LV= entered the top 10 after almost doubling its advertising spending in 2008 6
Norwich Union Direct's advertising spend declined the most in 2008 6
The top insurance advertisers devoted the bulk of their budgets to TV advertising in 2008 8
The top 10 insurance advertisers collectively spent more than £128.6m on TV advertising in 2008 8
Saga spent the most on direct mail, highlighting its importance in cross-selling 8
Other media such as radio and press played a smaller role 8
APPENDIX 10
Definitions 10
Premium income measures 10
Gross Premium 10
Written premiums 10
Distribution definitions 10
Banks/building societies 10
Broker 10
Company staff 10
Direct 10
'Other' company agents 10
Partnerships 10
Further reading 11
Ask the analyst 11
Datamonitor consulting 11
Disclaimer 11

List of Tables 

Table 1: Private motor insurance GWP distribution by channel (All business), 2004-08e 3
Table 2: Household insurance GWP distribution by channel (All business), 2004-08e 5
Table 3: Top 10 personal general insurance advertisers, 2006-08, (£) 7
Table 4: Top 10 personal general insurance advertisers' spend by media, 2006-08 (£) 9

List of Figures 

Figure 1: The direct channel continues to be the number one route to market for private motor insurance 3
Figure 2: Banks lost market share in the home insurance market as mortgage linked sales declined in 2008 5
Figure 3: Three aggregators now feature in the top 10 insurance advertisers 7
Figure 4: The top 10 general insurance advertisers devoted the majority of their spending to TV advertising in 2008 9