United Kingdom (UK) Household Insurance Market Dynamics, Trends and Opportunities, 2023
Summary
This report analyzes the UK household insurance market, looking at drivers of uptake across different demographics and dwelling types. It discusses the claims landscape in 2022 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.
GlobalData expects gross written premiums (GWP) in the household insurance market to grow by 2.9% by the end of 2023, following its 3.3% decline to GBP5.97 billion in 2022. The 2022 decline was primarily caused by a 5.6% decrease in the total number of policies written across all three products. The overall average premium price fell by 5.3% over the course of 2022, playing a role in the GWP decline. Combined, buildings-only, and contents-only insurance premiums decreased by 5.6%, 8.1%, and 8.4% respectively in 2022.
Scope
- The UK household insurance market is expected to grow by 2.9% in 2023, following a 3.3% decline in 2022.
- The average premium prices for combined, buildings-, and contents-only insurance decreased by 5.6%, 8.1%, and 8.4% respectively in 2022. Furthermore, the number of policies for all products fell, contributing towards the overall decline in GWP.
- Home insurance claims in the UK rose in 2022, with the cost of claims growing by 6.2% and the total number of claims reported increasing by 2.6%. A significant increase in weather-related and subsidence claims was the main factor behind the uptick in overall claims.
- Generation Rent remain an untapped demographic as roughly half have contents-only insurance in place.
- Identify underlying drivers of demand and premium prices for home insurance products.
- Examine the nature of the claims landscape in 2022.
- Compare the performances of market leaders throughout the year.
- Determine how insurtechs are attempting to gain traction in the market.
- Understand the impact of inflation in the home insurance market going forward.
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Market Dynamics
- The UK household insurance market fell in 2022, but will return to growth by the end of 2023
- Table Figure 1: UK household insurance market GWP slumped by 3.3% in 2022
- Table Household insurance GWP, annual growth rate, 2018-22
- Table Figure 2: Home insurance premiums have been on the rise since the large dip in Q1 2022
- Table Yearly and quarterly average household insurance premium rate movements, Q1 2018-Q2 2023
- Table Figure 3: Combined insurance makes up 82.5% of total home insurance GWP in 2022
- Table Figure 4: Roughly 50% of all renters have a home insurance product in place
- Table Percentage of respondents holding any form of home insurance, 2021-22
- Table Figure 5: The number of UK renters increased in 2022
- Table Figure 6: Many have not purchased home insurance as it is too expensive
- Table Figure 7: Uptake of contents-only insurance has fallen, whereas a quarter of renters have the wrong insurance
- Government and regulatory policies in home insurance
- The claims landscape in 2022
- Table Figure 8: Overall cost of claims incurred grew by 6.2% in 2022
- Table Figure 9: Number of claims notified increased by 2.6% in 2022
- Table Household gross claims incurred and number of claims notified, by type, 2018-22
- Table Figure 10: Rebuild costs are still growing, just at a slower pace in 2023
- Table Figure 11: Consumers are reluctant to change their level of cover amid the cost-of-living crisis and high rebuild costs
- The housing market is returning to normal levels following a dip from the pandemic
- Table Figure 12: New home registrations and completions continue growing in 2022, with a large increase in registrations
- Table New home registrations and completions, 2018-22
- Table Figure 13: Mortgage approvals dropped off towards the end of 2022, in line with interest rates increasing
- Table Figure 14: Younger consumers are more likely to be renting due to difficulty getting on the property ladder
- The UK household insurance market fell in 2022, but will return to growth by the end of 2023
- Competitor Dynamics
- Aviva remains the largest provider of home insurance in 2022
- Table Figure 15: Aviva retains its position as the leader in the household insurance market
- Table Top 10 UK household insurers by GWP and market share, 2020-22
- Insurtechs and recent developments
- Aviva remains the largest provider of home insurance in 2022
- The Market Going Forward
- Growth in the market is expected to be stagnant through 2027f
- Table Figure 16: Premiums in the household insurance market are expected to increase in 2023f
- Table UK household insurance market forecasts, 2022-27
- Smart home devices and the future of home insurance
- Table Figure 17: Younger consumers are far more likely to be willing to share smart home data with their insurer
- Table Figure 18: Uptake of smart home devices in the UK, 2022
- Other providers may enter the market
- Table Figure 19: Big tech firms hold a strong position of trust among consumers if they were to sell home insurance
- Extreme weather events will affect claims
- Growth in the market is expected to be stagnant through 2027f
- Appendix
- Abbreviations and acronyms
- Methodology
- Table Figure 20: Forecasting methodology
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
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