UK Motor Insurance Consumer Research Report June 2019: Around One-in-Ten Drivers are Not Insured

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Jul 15, 2019, 14:45 ET

DUBLIN, July 15, 2019 /PRNewswire/ -- The "UK Motor Insurance Consumer Research Report June 2019" report has been added to ResearchAndMarkets.com's offering.

Around one-in-ten Drivers are not insured

Around 80% of consumers are Drivers, defined as individuals who either own a car or have use of a car owned by someone else. Only around nine-in-ten Drivers have motor insurance, with the 10% of uninsured Drivers representing those who are driving illegally without insurance, those whose cars have SORN status, children whose insurance may be fronted by their parents and don't consider themselves as owning insurance, and those who use company cars for personal purposes with the car insured by businesses.

A feature of car ownership and insurance cover is that both tend to rise strongly with age, social grade and income. The percentage of Drivers who are insured also tends to rise with age and income, suggesting it is younger, less affluent consumers who are most likely to drive without insurance and benefit from fronting.

Key facts

69% of consumers said they owned a car and 8% don't own a motor car but have the use of a car owned by someone else. As a result, 76% of consumers are Drivers
Only 89% of Drivers said they had motor insurance 74% of Drivers aged 18-24 say they are covered by insurance, compared with 93% of adults aged 55+
80% of drivers with net monthly income of less than 1,000 say they are covered by insurance, compared with 86%-91% of those with net income of 1,000 and more each month.

Most insured drivers are risk averse and happy with the cost of their insurance Over seven-in-ten motor insurance policyholders can be considered as risk averse, with most policyholders fitting into the Contented Comfort Seekers group, a group of policyholders who see insurance as a comfort (safety blanket) and who do not see insurance as a waste of money. A smaller number of policyholders fit into the Discontented Comfort Seekers group, a group of policyholders who while being risk averse also think insurance is a waste of money (i.e. not good value for money).

Key facts

66% of policyholders are in the Contented Comfort Seekers group and 7% in the Discontented Comfort Seekers Group
But around one-quarter would take risks if they could Just over one quarter of policyholders can be thought of as prepared to take risks. They do not support the view that it's better to be safe than sorry when it comes to insurance. These individuals tend to be insured because either insurance has a value to them other than as a means to mitigate risks (Derived Insured) - i.e. it's necessary in order to drive - or insurance is forced on them by law (Reluctant Insured).

Men, young adults, less affluent consumers and those from the working-class social grades are more likely to hold the Reluctant Insured attitudes (the most negative view of insurance) rather than a Contented Comfort Seeker Attitude (the most positive view of insurance). There is no doubt that the relative cost of insurance for young, less affluent males and possibly young, male machismo makes these groups less likely, compared with other adults, to be risk averse and more likely to see insurance as a waste of money.

Key facts

16% of policyholders fall into the Derived Insured group and 10% into the Reluctant Insured Group
38% of Reluctant Insured policyholders are below the age of 35, compared with 28% of Contented Comfort Seekers
While 82% of policyholders do not see their insurance as a waste of money, 17% do. Just over one-third of policyholders need significant assistance arranging andbuying insurance

Just over one-third of adults fall into the Need Assistance group, a group of policyholders who do not have confidence when buying insurance and do not feel they have enough knowledge to buy without professional help. These consumers need the greatest levels of support and assistance when buying insurance.

In sharp contrast, just under one-third of policyholders fall into the Self-Reliant group, a group of policyholders who feel they are confident and savvy consumers when buying insurance and who also feel they can choose insurance without consulting a financial advisor or broker.

Between the two groups above come policyholders who are Guided Self-Arrangers (policyholders who are not confident buying insurance but opt for guidance rather than tailored, bespoke professional help from a broker) and Confident Advice Takers (policyholders who are confident when buying insurance but who also want professional help and advice).

Savvy consumers who are confident when buying insurance tend to be relatively affluent policyholders. They are also more likely to be aged 35 and over rather than below the age of 35. In contrast, adults who need advice and assistance tend to be younger consumers and those with the greatest need for advice (i.e. Needs Assistance) are the most likely to be young and less affluent.

Key facts

36% of policyholders fit into the Needs Assistance group, while 31% fall into the SelfReliant Group
18% of policyholders are Guided Self-Arrangers and 15% Confident Advice Takers
Therefore, 46% of policyholders are confident when arranging insurance and 54% are not, with 51% open to getting professional advice and 49% not.

Many policyholders may shop online but they are flexible in their approach Most policyholders adopt a flexible, agile approach to arranging insurance, showing a willingness to research and buy insurance via both online and offline channels. However, almost half of motor insurance holders show a preference for carrying out some or all of their customer journey online. Policyholders who are more willing to use online for all or part of their customer journey tend to be confident when buying insurance and less in need of advice and assistance.

Younger consumers are those who need the greatest advice and assistance to buy reasonably priced insurance and this may only be available offline via telephone or face-to-face meetings with brokers and advisors. As a result, the preference for online research and buying tends to start relatively low and increases as policyholders age from 18 towards 44. After the age of 44 and especially past the age of 55, the influence of online starts to wane. Therefore, within the motor insurance market there is a clear circular change in the willingness to undertake a customer journey offline as consumers age, with openness to offline advice and purchasing starting relatively high, then declining as consumers get to around the age of 44, and then rising subsequently.

Key facts

52% of policyholders can be considered as Agile Buyers (consumers showing neither a preference for getting advice nor buying online, although they could do both)
48% of policyholders show a desire to get some or all of their customer journey completed online.

Policyholders prefer non-telematics standalone policies Around eight-in-ten policyholders buy a separate, standalone policy, this being especially true if the policyholder is aged 45 and over and/or a pensioner. Buying bundled policies is more common among young and more affluent adults. Buying insurance via brokers tends to increase the likelihood of buying bundled insurance.

Key Topics Covered:

1.EXECUTIVE SUMMARY

2.INTRODUCTION

3.PROFILE OF THE INSURED DRIVER

Key findings
Almost seven-in-ten adults own a car
And almost one-in-ten have use of a car they do not own
Meaning over three-quarter of adults are Drivers
Just over seven-in-ten adults own motor insurance
Car ownership and insurance cover strongly related to age, social grade, and income
Evidence for fronting
Drivers in Inner London and Northern Ireland the least likely to be insured
Almost six-in-ten insurance policies cover small or medium sized cars

4.HOW DRIVERS APPROACH INSURANCE

Key findings
Risk aversion and value perceptions
Young, working-class men, the least likely to value motor insurance
Confidence and self-reliance
One-third of motor insurance holders need assistance
Predisposition toward an online customer journey
The Circle of Motor Insurance Life

5.THE TYPES OF INSURANCE OWNED

Key findings
Standalone or packaged?
Older adults tend not to bundle, but affluent ones may
Self-Reliant consumers who buy online opt for standalone policies
Very few policyholders opt for multi-car cover
Less than one-in-ten have telematics insurance but there is growth potential
Young, affluent males the most likely to have a telematics policy
Most policyholders have motor breakdown cover
One-in-five policyholders have a dash cam

6.THE CUSTOMER JOURNEY BEGINS

Key findings
Around nine-in-ten policyholders are repeat purchasers
With over one-third switching provider
Discontented Confident consumers who like to shop online are the most likely to switch
The importance of the renewal prompt
Renewing does not mean being passive

7.BUYING A POLICY: FINDING THE RIGHT DEAL

Key findings
Price comparison websites dominate the research space
Online attitudes drive online self-discovery
As do perceptions of trust
Ease of use and information the key positives of PCWs
The PCW dominance is here to stay
Policies are purchased either directly or via PCWs
The method of policy acquisition drives the acquisition channel
The information source drives the acquisition channel

8.PRICE, COVER OR BRAND?

Key findings
Five purchasing strategies
Comfort Seekers like the warmth of a familiar brand
Shopping online is not all about price
As policyholders age, so the focus shifts towards cover and away from price
Whereas brand focus is more to do with income and social grade
Buying insurance comes down to negotiation
But do consumers have the armour to negotiate adequately?
It's the volume of paperwork that limits knowledge

9.BEING A POLICYHOLDER

Key findings
A generally pain-free experience
Online policy management now becoming the norm
21% of policyholders have claimed within the past five years
Claims are concentrated at the top end of the market
The claims process goes smoothly for most claimants, resulting in high levels of satisfaction.

10.ENDING THE JOURNEY: CUSTOMER LOYALTY AND SWITCHING

Key findings
Loyalty is in short supply
And there is no sign it is going to improve in the future
Switching is strongly price led
Which brings into focus the issue of price walking

11.CROSS SELLING OPPORTUNITIES

Key findings
Motor insurance policyholders are a prime market for insurance products
Large gaps in insurance coverage for electronic products

Companies Mentioned

Financial Conduct Authority (FCA)
Go Compare
IRN Research (Consultants)
MIS Group UK
Motor Insurance Bureau (MIB)
The AA

For more information about this report visit https://www.researchandmarkets.com/r/6wsr6q

Research and Markets also offers Custom Research services providing focused, comprehensive and tailored research.

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SOURCE Research and Markets