United Kingdom (UK) Personal Lines Insurance Distribution Dynamics by Consumer Channel Preferences (Direct, Broker, Bank, Affinity and Price Comparison Webiste Channel) and Future Market, 2022 Update

United Kingdom (UK) Personal Lines Insurance Distribution Dynamics by Consumer Channel Preferences (Direct, Broker, Bank, Affinity and Price Comparison Webiste Channel) and Future Market, 2022 Update

Summary

This report examines consumer channel preferences in the personal lines space and how these have changed over time - including the drivers behind customers’ choices. It also forecasts the future of personal lines distribution to 2026.

The direct channel remains the most frequently used option when it comes to purchasing insurance. The channel increased its share of distribution in 2021, rising by 0.5 percentage points (pp) compared with 2020. With many insurers and distributors enhancing their online and digital capabilities in response to shifting consumer habits brought on by the COVID-19 pandemic, consumers are increasingly inclined to purchase insurance online. Price comparison websites (PCWs) are highly effective at making consumers switch insurer. The majority of consumers said they chose to buy insurance through a PCW because they had previously used it. This suggests PCWs are excellent at locating the best offers for customers. On January 1, 2022, new Financial Conduct Authority (FCA) price regulations regarding dual pricing went into effect. The ability to undercut prices in the market has decreased as a result of the new regulations, which saw PCWs’ share fall by 2.3pp compared to 2020.

Scope

• The direct channel remains the most frequently used option when purchasing insurance.
• The proportion of business sold through the direct channel increased by 0.5pp in 2021 to 49.4% of total personal lines distribution.
• In 2021, the broker channel grew by 0.3pp as consumers looked to utilize brokers in search of better deals.

• Understand how certain distribution channels in the UK general insurance market performed in 2021.
• Ascertain how underlying factors and drivers in these markets will shape them going forward.
• Discover preferred methods of purchasing through each respective distribution channel.
• Understand switching behavior in each respective distribution channel.
• Explore the future market shares in the distribution of personal lines to 2026f.