UK Private Motor Insurance: Market Dynamics & Opportunities 2019

Table of Contents

1. EXECUTIVE SUMMARY

• 1.1. Growth begins to slow in the run up to the Civil Liability Act
• 1.2. Key findings
• 1.3. Critical success factors

2. MARKET DYNAMICS

• 2.1. Introduction
• 2.2. The private motor insurance market continued to grow in 2018
  • 2.2.1. Growth in the market slowed to 0.97% to reach £13.1bn in GWP
• 2.3. A multitude of factors drive premiums down
  • 2.3.1. Premiums have begun to decrease after reaching an all-time high in 2017
  • 2.3.2. The most recent Ogden rate change has been disputed by insurers
  • 2.3.3. IPT remains frozen at 12%
  • 2.3.4. Premiums hit a yearly high in Q4 2018 for the fifth consecutive year
  • 2.3.5. Renewal notice requirements have begun to have an effect
  • 2.3.6. “Average premium” confuses consumers
  • 2.3.7. Comprehensive premiums remain lower than TPFT despite lower cover
• 2.4. The motor claims landscape in 2018
  • 2.4.1. Claims notified rose despite previous falls
  • 2.4.2. Average claim value rose for the third consecutive year
  • 2.4.3. Bodily injury claims
• 2.5. Road traffic accidents (RTAs) and their link to claims
  • 2.5.1. Whiplash claims continue to drive up premiums
  • 2.5.2. Total RTAs continue to decline, while number of claims increased slightly after a sharp fall
  • 2.5.3. Car occupants are the least vulnerable individuals in RTAs
  • 2.5.4. Car and taxi use has continued to increase
  • 2.5.5. The pay-as-you-go insurance opportunity grows as average mileage falls again
  • 2.5.6. The UK motor parc continues to grow

3. COMPETITOR DYNAMICS

• 3.1. Direct Line remains the market leader
  • 3.1.1. Insurers battled to stay in the top five
• 3.2. Analysis of the market leaders
  • 3.2.1. Direct Line remained number one despite minimal growth in 2018
  • 3.2.2. Aviva remained in second place, but fell further behind in real terms
  • 3.2.3. Ageas struggled to hold its market share
  • 3.2.4. LV= gained market share thanks to its joint venture with Allianz

4. THE MARKET GOING FORWARD

• 4.1. The Civil Liability Act has been delayed to April 2020
  • 4.1.1. Decreasing personal injury claims may threaten implementation
• 4.2. The Civil Liability Act aims to reform personal injury motor claims
  • 4.2.1. The Civil Liability Act seeks to cut claims costs
  • 4.2.2. The Civil Liability Act is forecast to save customers £35 on motor insurance premiums
  • 4.2.3. The small claims limit will increase to £5,000 for RTA claims
  • 4.2.4. A tariff system is being introduced for RTA-related soft tissue injury claims
  • 4.2.5. Claims will not be settled without a MedCo medical evidence report
  • 4.2.6. There has been a positive reaction to the Civil Liability Act
• 4.3. Predictions for the market
  • 4.3.1. The future of the private motor insurance market is uncertain
  • 4.3.2. Changes to claims costs remain critical to premiums and GWP
  • 4.3.3. The forecast for the next five years
• 4.4. The number of telematics policies is increasing
  • 4.4.1. The number of young people learning to drive continues to decrease
  • 4.4.2. Young drivers turn to telematics to lower costs
  • 4.4.3. Dash cams are becoming the new telematics
• 4.5. Connected cars and smart roads will increase driver safety
  • 4.5.1. Connected cars are the future of providing better insurance services
  • 4.5.2. From 2022, all new cars must have a speed limiter
  • 4.5.3. Smart roads will make driving safer
• 4.6. The complexity of electric vehicle systems drives up premiums
  • 4.6.1. Electric vehicles will represent more of the motor parc
• 4.7. Fully autonomous vehicles will disrupt the motor insurance landscape
  • 4.7.1. Driverless cars are expected to be mainstream by 2045
  • 4.7.2. The government is supporting the development of driverless cars
  • 4.7.3. Safety and testing of autonomous vehicles remains hazy
  • 4.7.4. A new sub-market of dual insurance policies for autonomous vehicle
  • 4.7.5. Car manufacturers have increased their presence in the insurance market
  • 4.7.6. Insurers will play a crucial role in the development of autonomous vehicles
  • 4.7.7. The 10 features for a car to be considered automated
  • 4.7.8. Public opinion of autonomous vehicles
  • 4.7.9. The divide between cars with and without drivers
  • 4.7.10. The need for personal car insurance could diminish
• 4.8. Usage-based, car sharing, and P2P policies are being launched
  • 4.8.1. The majority of new, innovative policies target millennials
  • 4.8.2. Motor insurers are beginning to see the opportunity in car sharing
  • 4.8.3. Usage-based, pay-as-you-go, and pay-per-mile car insurance are gaining traction

5. APPENDIX

• 5.1. Abbreviations and acronyms
• 5.2. Methodology
  • 5.2.1. UK Top 20 General Insurance Competitor Analytics methodology
  • 5.2.2. Forecasting methodology
• 5.3. Secondary sources