United Kingdom (UK) Household Insurance Market Size, Trends, Competitor Dynamics and Opportunities
Summary
This report analyzes the UK household insurance market, looking at drivers of uptake across different demographics and dwelling types. The report discusses the claims landscape in 2021 as well as the housing market and upcoming regulatory changes within insurance. Incumbent competitors are analyzed and compared, as are newcomers and insurtechs within the space. Future impactors in the market, including climate change, smart home devices, and changing living arrangements, are also covered.
Gross written premiums (GWP) declined by 0.2% in 2021. This was driven by a 1.4% fall in total policies written across all three products in the home insurance space. The overall average cost increased by 1.3% in 2021. However, average costs for both buildings-only and contents-only have fallen in 2021, with average premiums for each decreasing by 0.4% and 1.4%, respectively. Despite increases in average claim costs, house prices, and house repair costs, GWP still decreased. House price increases have been driven by the stamp duty holiday that was in place between July 2020 and October 2021 boosting home purchases. The bounce back from the pandemic sped up new house-build completions, and inflation and global supply-chain issues have caused repair costs to rise. We forecast a fall in GWP in the market in 2022 and for it to decline gradually year on year until 2026.
Scope
- In 2021, the UK’s home insurance market shrank by 0.2% to GBP6.31 billion.
- For combined policies, the average premium price rose by 1.4% in 2021. They declined by 0.4% and 1.4%, respectively, for buildings-only and contents-only insurance.
- All types of claims notified fell, except for escape of water. Gross claims for escape of water increased by 17.5% in 2021 as a result of lockdown relaxations meaning fewer individuals were at home.
- Less than half of all UK renters have a contents-only insurance policy, making Generation Rent a large, untapped demographic for insurers.
- Identify underlying drivers of demand and premium prices for home insurance products.
- Examine the nature of the claims landscape in 2021.
- Compare the performances of market leaders throughout the year.
- Determine how insurtechs are attempting to gain traction in the market.
- Understand the progression of home insurance lines into the future.
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Market Dynamics
- The UK household insurance market's growth has been largely stagnant in recent times
- Table Figure 1: UK household insurance market GWP declined in 2021
- Table Household insurance GWP, annual growth rate, 2017–21
- Table Figure 2: Home insurance premiums fall drastically in Q1 2022
- Table Yearly and quarterly average household insurance premium rate movements, Q1 2017–Q1 2022
- Table Figure 3: Combined insurance makes up the majority of GWP
- Table Figure 4: Penetration rates for tenants are at approximately 50%
- Table Percentage of respondents holding any form of home insurance, 2020–21
- Table Figure 5: The total number of UK renters increased in 2021
- Table Figure 6: Renters may opt not to obtain house insurance for a number of reasons
- Table Figure 7: Almost a quarter of private renters have the wrong cover
- Government and regulatory policies in home insurance
- The claims landscape in 2021
- Table Figure 8: Overall claims incurred grew by 5.0% in 2021
- Table Figure 9: Number of claims notified fell by 4.9% in 2021
- Table Household gross claims incurred and number of claims notified, by type, 2017–21
- Table Figure 10: Supply chain issues and inflation are causing rebuild costs to grow drastically
- Table Figure 11: Both supply-side and demand-side factors influence inflation
- The housing market is recovering after the pandemic
- Table Figure 12: New home registrations and completions bounced back almost to pre-pandemic levels
- Table New home registrations and completions, 2017–21
- Table Figure 13: Mortgage approvals return to normal as the stamp duty holiday ends
- The UK household insurance market's growth has been largely stagnant in recent times
- Competitor Dynamics
- Aviva continues to lead the market
- Table Figure 14: Aviva remains the market leader in the home insurance market
- Table Top 10 UK household insurers by GWP and market share, 2019–21
- Insurtechs and recent developments
- Table Figure 15: Comparison websites are still the most common pre-purchase method for combined insurance
- Aviva continues to lead the market
- The Market Going Forward
- The market is expected to slowly shrink
- Table Figure 16: The home insurance market will shrink over the next five years
- Table UK household insurance market forecasts, 2021–26f
- Smart home devices and the future of home insurance
- Table Figure 17: Smart home device data is more likely to be shared with an insurer by people aged under 30
- Other providers may enter the market
- Table Figure 18: The idea of obtaining home insurance from non-traditional suppliers is one that consumers are increasingly open to
- Climate-related weather events will affect claims
- The cladding situation can be assisted by insurers
- The market is expected to slowly shrink
- Appendix
- Abbreviations and acronyms
- Methodology
- Table Figure 19: Forecasting methodology
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
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