2021 UK Motor Insurance Consumer Research Report - How Price Sensitivity is Impacting the Market and how COVID-19 has Affected Behaviours and Experiences

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Apr 01, 2021, 12:15 ET

DUBLIN, April 1, 2021 /PRNewswire/ -- The "UK Motor Insurance Consumer Research Report 2021" report has been added to ResearchAndMarkets.com's offering.

In 2021, 71% of consumers said they owned car insurance, which is the same percentage as in 2019. This means around 37 million consumers own motor insurance. The penetration of consumers who own motor insurance tends to rise with age, social grade and household income.

A new customer journey begins each year. Each year, over 90% of motor insurance policyholders are existing policyholders and their choice comes down to either renewing with an existing provider (around half renew each year) or switching from one provider to another (around four-in-ten switch each year). Less than 10% of consumers embarking on a new customer journey each year are new market entrants - i.e., buying motor insurance for the first time. Even if renewing, policyholders generally still embark on a new customer journey: over eight-in-ten of policyholders renewing still search for alternatives policies and/or negotiate for a revised deal from their provider before they agree to renew.

Just over one-in-five policyholders have made a claim on their motor insurance within the past five years, with just under one-in-ten claiming within the past year. Comparing claimants who have claimed in the past year with those who claimed 2 to 5 years ago, shows a drop in satisfaction among those claiming in the past year, based on the fact that outcomes worsened slightly, and the process seemed harder. One feature of the motor insurance market in the Pandemic has been the greater use of digital technologies and artificial intelligence to assess claims and damage to a car (if involved in a road traffic accident). Policyholders claiming in the past year are the most likely to have encountered the automated claims handling systems widely used by the main providers during the Pandemic: this could have lowered the satisfaction of these policyholders.

One-third of motor insurance policyholders have been impacted by COVID-19 when it comes to their motor insurance. The most common actions/experiences centre on premiums - either switching provider/policy to save money or being offered a rebate by their provider. The policyholders most impacted by COVID-19 tend to be younger professional policyholders, aged under the age of 45, from the AB social grades, who have made a recent claim.

Other findings from the report, include:

Motor insurance policyholders are price-focused. A large majority put price first when evaluating a policy and cover second. However, the final price paid, and the level of cover achieved by policyholders is often the outcome of policyholder/insurance provider negotiation: almost seven in ten policyholders negotiate with their provider before buying a policy.
When looking for insurance deals at the start of a customer journey, price comparison websites (PCWs) are by far the most popular resource. When it comes to purchasing, policyholders tend to buy their policies either directly from the provider or via PCWs. Other purchase channels show little usage.
When buying insurance, consumers continue to see each car in the home as a distinct item to insure, so few have multi-car cover and few opt for multicover policies.
Less than one-in-ten policyholders have a telematics insurance policy and penetration has changed little between 2019 and 2021, but there has been an increase in a willingness to get a telematics policy among policyholders without a policy at the moment.
Many policyholders bundle extra cover with their motor insurance policy: along with their motor insurance, almost four-in-ten take out motor legal protection and almost one-in-five breakdown cover.
Motor insurance policyholders show a liking for the security of high levels of insurance cover rather than being content with the bear minimum of protection. While most like to buy online they also show a relatively high willingness to get advice.

This report examines the motivations, experiences and opinions of the UK motor insurance customer. It will identify and analyse consumer attitudes towards motor insurance, look at the claims experience of drivers, and investigate why they choose one route to purchase over another. In addition, it will explore how price sensitivity is impacting the market and how COVID-19 has affected behaviours and experiences. Similar research was run in 2019 and comparisons between results in 2019 and 2021 are also made

Key Topics Covered:

Seven-in-ten consumers own car insurance.
The insured prefer standalone, mainstream policies.
Motor insurance policyholders like to minimise their risks.
The customer journey merry-go-round
Policyholders like to discover deals online, mainly via PCWs.
Policies are purchased via PCWs or direct.
Motor insurance purchases are price focused.
Brands are important but are not everything.
Most policyholders have a good experience.
Less than one-in-ten have claimed in the past year.
The claims process seems to run smoothly for most.
Almost one-third have been impacted by COVID-19.

For more information about this report visit https://www.researchandmarkets.com/r/ng5jhi

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SOURCE Research and Markets