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

UK Private Motor Insurance: Market Dynamics & Opportunities 2019

Summary

This report analyzes UK private motor insurance, looking at market size as well as changes in premiums, claims, road casualties, the motor parc, regulations, and opportunities. It discusses the leading competitors and how the market is likely to change due to telematics and driverless cars, as well as providing future forecasts of market size up to 2023.

Gross written premiums (GWP) expanded by less than 1% in the private motor insurance market in 2018, following a period of stronger growth. A year of low growth for the market made it tough for insurers to increase their GWP, with competition heating up among the top five players. As claims costs continue to rise, insurers eagerly await the Civil Liability Act coming into full effect. Technology advancements - above all driverless cars - will be pivotal in this market over the next five years.

Scope

- Measured by GWP, the private motor insurance market was worth £13.1bn in 2018.
- Average premiums fell slightly to £477 in 2018 after peaking at £481 in 2017.
- Direct Line remained the largest private motor insurer in 2018, holding over 12% of the market as Admiral challenged Aviva for second place.
- Personal injury claims remain the biggest average and total cost for insurers, costing an average of £10,454 per claim and over £3.2bn per year.

Reasons to buy

- Ensure you remain competitive as new innovations and insurance models begin to enter the market.
- Be prepared for how regulation will impact the private motor insurance market over the next few years.
- Benchmark yourself against leading competitors.