UK B2C Insurance Distribution

Part
01
of nine
Part
01

Consumers Behavior

In the United Kingdom, consumers who buy home insurance online view price as a key purchase consideration and are therefore inclined to consult a price comparison website. They believe that the online buying process can be improved further by simplifying questions or removing unnecessary questions. They are willing to share personal data with home insurers in exchange for deeper personalization, but they are afraid that home insurers may use their personal data to deny their claim or increase their premium instead.

Importance of Price

  • Before purchasing home insurance, consumers in the United Kingdom typically visit a price comparison website first.
  • According to market advisory and intelligence firm, Mordor Intelligence, visiting such a website is the activity consumers most commonly perform before making the actual home insurance purchase online.
  • This behavior underscores how important price is for consumers purchasing home insurance online.

Complexity of Application Process

  • In the country, 38% of adults with home insurance find home insurance applications questions as difficult as General Certificate of Secondary Education (GCSE) questions, and 32% of adults with home insurance have given up acquiring an insurance quote because they do not have the information needed or they feel the application process is taking too much of their time.
  • Seventy-six percent of adults with home insurance believe that insurers should make the buying process faster, less expensive, and less complicated.
  • Considering that the online channel is the most commonly used channel among consumers seeking home insurance, with over 40% of written premiums taking place online, the aforementioned findings likely hold true as well with adults buying home insurance online.
  • In response to these survey results, Aviva recently streamlined the 'quote and buy' journey of its home insurance consumers on all its digital channels, namely, the MyAviva online portal, the MyAviva mobile app, and the Aviva website. The company was able to remove some complex questions because it was able to find another way to identify the risk associated with a property.

Satisfaction with Retailers Offering White-Label Insurance

  • Consumers buying their home insurance online from retailers appear to be both loyal to these retailers and satisfied with these retailers' insurance services. Retailers are among the insurance providers in the country with the highest Net Promoter Scores.
  • Retailers, such as Tesco, offer white-label insurance products that are underwritten by big insurers. As its Net Promoter Score indicates, supermarket giant Tesco, which sells home insurance online, has quite a loyal white-label insurance customer base.

Attitudes Towards Data Privacy

  • In the country, 74% of consumers are willing to share their personal data with home or motor insurers in exchange for more relevant products or services and deeper personalization online.
  • Sixty-three percent of consumers are okay with motor or home insurers having direct access to personal data they have shared online with third parties as long as that data will be used to refine product or service recommendations.
  • However, 51% of non-life insurance consumers are wary that non-life insurers will use their personal data to deny their claim or raise their premiums instead.

Willingness to Buy from Alternative Providers

  • In the country, around 40% of consumers in the country would consider buying insurance from Amazon, around 40% would consider buying insurance from Google, and around 20% would consider buying insurance from Facebook.
  • The insurance markets that are expected to benefit the most from this shift in consumer behavior are the home insurance, motor insurance, and travel insurance markets.
  • In fact, 20% of consumers in the country are already open to buying home insurance from Google or Amazon. With their expertise in smart home devices, Google and Amazon are well-positioned to enter the home insurance market.

Research Strategy

In gathering insights about consumers buying home insurance online, we prioritized surveys, industry reports, and materials from reputable consulting firms. We considered as well what home insurance providers have to say about their consumers who buy insurance online. Though information on the subject is limited, we were able to compile five insights about the behavior of consumers who buy home insurance online.
Part
02
of nine
Part
02

Online B2C Sales Sold via Aggregator Websites

The total gross written premiums sold via price comparison websites in the United Kingdom was estimated at $44 billion (calculations below). More details on the calculations, as well as other findings, have been provided below.

United Kingdom Insurance Sales Via Aggregator Websites

  • The total gross written premiums sold via price comparison websites in the United Kingdom was estimated at $44 billion (calculations below).
  • According to McKinsey, 50% of all online insurance sales in Europe are sold through aggregators.
  • In 2017, the total gross written premium by aggregator websites in the motor insurance segment was estimated at EUR 3.65 billion, 53% of the market.
  • About 74% of revenues for aggregator websites in the United Kingdom come from the insurance industry.
  • Approximately 50.7% of customers who bought travel insurance did so via price comparison websites.
  • According to a report by the Association of British Insurers, "20% of Gross Written Premiums now written through price comparison sites."

Research Strategy

We commenced our research into the percentage or volume of online B2C insurance sales that are sold via aggregator websites in the UK by searching for market reports that would shed more light on this segment of the insurance industry. First, we looked through market research firms such as Mordor Intelligence as well as consulting firms such as McKinsey. Although we found many reports that even though they were not focused entirely on aggregators, they still referred to the influence of aggregators in the UK and European insurance markets. But none of this information covered the volume or percentage of B2C aggregator insurance sales.

We further looked through industry associations like the Association of British Insurers and found a report titled the "UK Insurance and Long-Term Savings: The state of the market," which included the percentage of Gross Written Premiums through the aggregators/price comparison websites channel. However, this information does not make it clear how this figure breaks down across the B2B and B2C segments. Our next approach was to conduct a press search on the subject matter to see if industry-related publications had reported a figure for this. The prevailing statistics we found using this approach was the percentage of motor insurance sold by aggregators.

We also tried to triangulate the requested data. We found that McKinsey estimated that 50% of all online insurance sales were via aggregators. We then attempted to find the total online insurance sales in the UK via the same routes used above, but these approaches did not yield the gross premiums written via online channels. Moreover, we would have also needed to know how this figure breaks down between the B2C and B2C segments.

That said, according to a report by the Association of British Insurers, "20% of Gross Written Premiums now written through price comparison sites." The term 'price comparison sites' is used interchangeably with the term aggregators. This report by McKinsey illustrates this point. Based on this information, aggregators account for 20% of the overall insurance market. Since aggregators are online businesses, then this covers the entire online insurance sales. Also, due to the lack of data or information segmenting the sales by B2C and B2B, we have assumed that the 20% represents only B2C sales as all reference to aggregators and price comparison sites point to ordinary consumers and not businesses. In line with these thoughts and assumptions, the total volume of insurance sold via aggregators is calculated as:
  • Total gross premiums written in the United Kingdom: $220 billion
  • Percentage of premiums written by Aggregators: 20%
  • Total gross premiums written by aggregators in the United Kingdom: 20% of $220 billion = $44 billion
To find examples of large UK insurers that publicly disclose the volume of sales via aggregator websites, we first searched for the largest insurance companies in the United Kingdom. We found a list by the Insurance Times, which provided the top nine insurance companies in the country. We then looked through their annual reports (examples here and here) and the press releases and news section of their websites to see if they reported on sales via aggregator websites. Our examinations of these sources did not reveal that any of these players reported the sales they get through aggregator websites. We also conducted a press search to see if media publications picked up on this report, maybe via other means such as interviews with executives, but we did not find anything concrete. As such, we have assumed that large UK insurers do not publish this detail.




Part
03
of nine
Part
03

Online B2C Insurance Sales Sold Directly

The percentage of online B2C insurance sales sold directly from insurers in the U.K. is 32.9%. Aviva and RSA Group are examples of large U.K. insurers that publicly disclose percentages of their insurance policies that are sold directly (explained in detail below).

Online B2C Insurance Direct Sales in the U.K.

  • A comprehensive study of U.K. consumers' insurance-purchasing decisions found that 32.9% of those individuals surveyed purchased insurance online directly from the insurer (with the exception of life insurance, which was not included in the study).
  • The aforementioned percentage was published in the European Commission's "Study on consumers’ decision making in insurance services: a behavioural economics perspective" (May 2017). We had to include a screenshot of that data from the report in this Google Doc because the report was only available in PDF format and thus we couldn't cite to it as a direct source.
  • The aforementioned percentage resulted from U.K. consumers being asked "about the means through which they had last purchased insurance from any non-life insurance provider."
  • With regard to large U.K. insurers that publicly disclose this information, the closest data we found are insurers that publicly disclose the percentages of their insurance policies that they sold directly. The two such insurers we found that do so are listed below. A full explanation of this limitation in the available information is included in the second and third paragraphs of the Research Strategy section below.
  • Aviva is a large U.K. insurer that publicly disclosed percentages of its insurance policies that it sold directly. We included screenshots of those publicly disclosed percentages in this Google Doc because the report was only available in PDF format and thus we couldn't cite to it as a direct source.
  • RSA Group is a large U.K. insurer that publicly disclosed percentages of its insurance policies that it sold directly. The insurer publicly disclosed the percentages of its insurance policies that it sold directly on page two of its 2018 Annual Report.
  • Both Aviva and RSA Group are among the nine largest "insurance companies in the UK ranked by gross written premium."

Research Strategy

We began our research by looking for insurance-industry studies and articles that might have mentioned the percentage/volume of online B2C insurance sales sold directly from the insurer in the U.K. In so doing, we reviewed numerous sources because information on this topic was rather limited. Examples of studies we reviewed were published by sources such as the Association of British Insurers, Mordor Intelligence, the European Commission, and Statista. Examples of articles we reviewed were published by sources such as McKinsey, Insurance Business Magazine, TechCrunch, and Accenture. Throughout our research, we specifically focused on non-business insurance because information about B2C insurance sales was requested (and thus we excluded B2B insurance sales (business insurance)). Furthermore, we specifically looked for online insurance sales, as was requested.
After identifying the percentage of online B2C insurance direct sales from U.K. insurers that we identified through the aforementioned research approach, we looked for large U.K. insurers that publicly disclose that information. The closest matches we could find were insurance companies that publicly disclosed the percentages of their insurance policies that they sold directly. Although those data points didn’t report those direct sales in terms of online and/or B2C specifically, the overall percentage of direct sales was the next-closest data point we were able to find, which is why we included that information.

We implemented three research approaches in looking for insurers that specifically, publicly disclose the percentage of their online B2C insurance direct sales (though those searches ultimately didn’t yield any relevant information). First, we conducted wide-ranging searches for any articles that might have mentioned such information (in sources such as those mentioned in the first paragraph above). Second, we checked numerous research studies because we thought examples of that information for various insurers might be included therein (from sources such as those mentioned in the first paragraph above). However, none of the many research studies we reviewed provided any such information whatsoever. Third, we individually looked up large U.K. insurers’ annual reports/publications to see if any directly reported such information therein. From those searches, the only applicable findings we identified were for the two insurers we provided above. Thus, we included those two insurers despite the fact that they apply to overall percentages of direct insurance sales.
Part
04
of nine
Part
04

Volume Controlled by Distribution Channels

UK homeowners and tenants do their research primarily from price comparison websites, with the majority of them purchasing from these websites as well. Purchasing insurance direct from the insurer comes in at a close second.

Overview

  • According to the 2019 UK Home Insurance Market report from Mordor Intelligence, the primary purchasing channels are direct, independent advisers, banks/building societies, utilities/retailers/affinity groups, company agents, and online channels.
  • In 2018, the home and motor sectors generated about "£18 billion in gross premiums."
  • Some 40% of consumers purchase home insurance via online channels in the UK.

Aggregator Websites

  • According to the October 2019 interim report from the Financial Conduct Authority, 34% of home insurance sales happen via "other intermediaries," which includes PCWs (price comparison websites).
  • According to a PWC report, 90% of UK insurance consumers visited price comparison websites to research products, with 73% saying that price is a prime decision-making factor.

Direct from Insurer

  • The October 2019 interim report from the Financial Conduct Authority states that 27% of UK home insurance company sales are direct from the insurer, while company agents account for 6%.
  • According to data compiled by Statista, 44% of UK consumers purchase general insurance products directly from the insurer, while 36% use independent advisers or brokers. Company agents account for 3% of purchases.

Other Financial Institutions

  • According to the October 2019 interim report from the Financial Conduct Authority, 24% of home insurance purchases happen via banks or building societies, while 9% occur via utilities, retailers, or affinity groups.
  • Some 9% of UK consumers purchase general insurance from banks or building societies, according to Statista, while 8% turn to utilities, retailers, or affinity groups.

Research Strategy

To determine the volume of homeowners or tenant insurance controlled by distribution channel, we consulted a variety of market reports and statistical databases. The 2019 interim report from the Financial Conduct Authority provided the required data. These sources identified the distribution channels as direct, independent advisers, banks/building societies, utilities/retailers/affinity groups, company agents, and online channels. Therefore, we gathered this data into the requested groups of aggregator websites, direct from the insurer, or other financial institutions.
Part
05
of nine
Part
05

Smartphone Penetration - UK

Smartphones have been the most popular internet-connected device in the UK since 2007 with 78% of adult Britons and a total of 55.5 million people using smartphones. The total monthly active smartphone users in the UK are expected to equal 75.4% of the total population in 2019 and reach 79.7% in 2022. Smartphone penetration within the UK has gone up among all ages since 2012 with 96% of those aged 16-24 and 71% of those aged 55-64 using a smartphone. Apple dominates the UK smartphone market. Detailed insights and statistics are below.

Penetration By Usage

  • Out of a total UK population of 66.9 million, there are 55.5 million smartphone users. This translates to 82.9% of the total population. Newzoo also ranks the UK in the 10th position by the number of smartphone users.
  • According to Ofcom, around eight in ten adults or 78% of adults in the UK use a smartphone.
  • Since 2007, when the iPhone and the BBC iPlayer were launched in the UK, smartphones have become the most in-demand internet-connected device.
  • The UK smartphone user penetration rate forecast is that monthly active smartphone users will reach 75.4% of the total population in 2019. The penetration rate will also reach 79.7% in 2022, an increase of more than 16% on the 2014 total of 61.7%.

Penetration By Age

  • According to Statista, smartphone penetration within the UK has increased among all ages since 2012. In 2018, a survey of people who use a smartphone found that 96% of those aged 16-24, 98% of those aged 25-34, 94% of those aged 35-44, 87% of those aged 45-54, and 71% of those aged 55-64 used a smartphone.

Penetration By Market Share





Part
06
of nine
Part
06

Demographic Profile - Smartphone Consumers

We were able to find directly applicable demographic information pertaining to age, gender, and education level for U.K. smartphone consumers. With regard to income, we were able to find demographics for mobile phone users. The only ethnicity demographics we could find pertained to U.K. internet users (which we included as a proxy) and we found some location demographics, though that available information was very sparse.

U.K. Smartphone Consumer Demographics

1. Age

  • A survey conducted between January and February 2019 of 2,519 Britonians ages 16+ found that 84% of them use a smartphone. A screenshot of that data graph is also included in this Google Doc.
  • The following are the percentages of people in the U.K. (surveyed in 2018) in the respective age brackets who said they use a smartphone: 16-24 year olds (96%); Ages 25-34 (98%); 35-44 year olds (94%); Ages 45-54 (87%); and 55-64 year olds (71%). A screenshot of that data graph is also included in this Google Doc.
  • A different 2018 survey found that 60% of those ages 50+ owned a smartphone in the U.K., as did 93% of those ages 18-34.

2. Gender

  • Among those surveyed (ages 16+), 73% of males "accessed the internet via a mobile phone in Great Britain in 2018" as did 70% of females. A screenshot of that data graph is also included in this Google Doc.

3. Location

A. Smartphones

  • Location demographics weren't available for the U.K. as a whole, so we focused on the individual countries within the U.K. (England, Scotland, Wales, and Northern Ireland).
  • In Scotland, 78% of individuals who used the internet said in 2017 that they did so via a smartphone. That percentage marked a 6% year-over-year growth rate (72% for 2016).
  • In Northern Ireland, 72% of people used a smartphone as of early/mid 2016. Some of Northern Ireland's rural areas experienced "a 16% increase in" the number of people who used a smartphone. As of early/mid 2016, Northern Ireland had the highest percentage of people who go online via their smartphones compared to any other U.K. region.

B. Mobile Phones

  • Among all U.K. countries/regions, London had the highest percentage of people who own one mobile phone (around 85%).
  • Among all U.K. countries/regions, East Midlands had the lowest percentage of people who own one mobile phone (around 78%).
  • Among all U.K. countries/regions, East Midlands had the highest percentage of people who own two mobile phones (around 15%).
  • Among all U.K. countries/regions, West Midlands and London essentially tied for the lowest percentage of people who own two mobile phones (each with around 9%).
  • Among all U.K. countries/regions, Scotland had the highest percentage of people who own more than two mobile phones (around 1.5%).
  • Among all U.K. countries/regions, North West had the highest percentage of people who don't own a mobile phone (around 7%).
  • Among all U.K. countries/regions, North East had the lowest percentage of people who don't own a mobile phone (around 3%).

C. Internet

  • Due to the very limited information available about location demographics for U.K. smartphone users, we also found demographics about U.K. internet users. We included those findings because the internet is often accessed via smartphones and thus these insights are tangentially related to location demographics pertaining to smartphone users.
  • A study conducted between January and March 2019 surveyed U.K. participants ages 16+ from various regions/countries within the U.K. The following are the percentages of individuals from each region/country "who had used the internet in the past 3 months" listed in descending order: Tie between London and South East (each with 93%); South West (92.3%); East of England (92%); North West (90%); East Midlands (89.9%); The Humber and Yorkshire (89.8%); Tie between Scotland and Wales (each with 89.6%); West Midlands (88.7%); North East (87.7%); and Northern Ireland (86.7%).

4. Ethnicity

  • Since we didn't find any ethnicity demographics for U.K. smartphone consumers, we included the ethnicity demographics we found for U.K. internet users as a proxy.
  • A study conducted between January and March 2019 surveyed U.K. participants ages 16+ from various ethnicities. The following are the percentages of individuals from each ethnicity "who had used the internet in the past 3 months" listed in descending order: Chinese (98.6%); Mixed (96%); Asian other (95.6%); Other (94.5%); African American (92.8%); Bangladeshi (91.9%); Pakistani (91.1%); White (90.5%); and Indian (90.4%).

5. Income Level

  • The only, relevant income-level demographics we could find pertained to mobile-phone users. A screenshot of the data noted in findings cited below is included in this Google Doc.
  • The following are the percentages of people in each income bracket who own a smartphone: Bottom 10% income bracket (85%); second-lowest income bracket (which we named the 11-20% income bracket) (87%); 21-30% income bracket (94%); 31-40% income bracket (96%); 41-50% income bracket (97%); 51-60% income bracket (97%); 61-70% income bracket (100%); 71-80% income bracket (99%); 81-90% income bracket (99%); and the top 10% income bracket (99%).
  • A Pew Research survey conducted in 2016 found that 82% of U.K. adults in the lower-income bracket owned a smartphone, while 98% who were in the higher-income bracket reported the same.

6. Education Level

  • Back in December 2012, a survey found that "82 percent of new students at universities or colleges in the UK own[ed] a smartphone."
  • A Pew Research survey conducted in 2016 found that 82% of U.K. adults in the less-education bracket owned a smartphone, while 98% of those in the more-education bracket reported the same. Interestingly, those smartphone-ownership percentages (82% and 98%) were the same as those for the aforementioned lower and higher-income brackets.

Research Strategy

Despite the limited demographics available for a few of the categories, we included all the relevant demographic information we found throughout our research for all the specified categories. The only category that we didn't find any information for pertaining to smartphones or even mobile phones was ethnicity. Accordingly, we had to expand our research to internet users, since that's at least tangentially related to smartphones since those internet users might well be going online via their smartphones. For the ethnicity, education-level, and location demographics (that had limited information available), we used three research approaches in looking for directly relevant information for each. First, we looked for any articles that might have included such data, in sources such as The Guardian. However, such data points weren't specified in any of the articles we reviewed. Second, we used the statistical database Statista to check if that source had any survey results about any of those categories. While that source yielded relevant information for some of the other requested demographics, it didn't for these three demographics that we were looking for. As a third strategy, we tried searching for the demographics by country within the U.K., instead of for the U.K. as a whole like we had been doing. From that revised approach, we were able to find a few insights pertaining to location, but that was the only of the three categories that we found results for. Lastly, we included all the directly and tangentially related demographics that we found about U.K. smartphone consumers throughout the entirety of our research.
Part
07
of nine
Part
07

Customer Sentiment - Purchasing Insurance Digitally

Customers purchasing insurance digitally in the UK love purchasing policies online, are reluctant to use apps, more open to new insurance offerings and players, are price-sensitive, and are less loyal.

Reluctance to Use Apps

  • Insurance customers in the UK are the most reluctant to downloading and using apps from their insurance providers among consumers in over 15 countries surveyed.
  • The percentage of UK consumers that said they would be willing to use an app provided by their insurance provider was 35%, compared to a global average of almost 70% among those surveyed.

Openness to New Entrants

  • Over 90% of millennials in the UK that use digital channels are open to buying insurance from new entrants, including those from outside the insurance industry.
  • Almost 80% of all insurance customers in the UK are also open to buying insurance from new entrants, including those from outside the insurance industry.
  • A different study by "data and analytics firm GlobalData claims that more than 30% of UK consumers stated they would purchase some form of insurance product from “alternative providers” such as tech giants like Google, Amazon, and Facebook."

Online is Popular

  • About 50% of policies were bought online in the UK, the largest share globally among consumers in various countries surveyed.
  • Consumers in the UK cite ease of use, ability to compare policies online, cheaper prices, and 24/7 availability as the reasons why they prefer using online channels.
  • "Although the move to digital is well-established, there is still a strong need to interact with an individual. When asked what would encourage them to purchase online, access to telephone support (35%) and online advice from a professional advisor (30%) were important."

Nomads With Less Loyalty

  • Insurance customers in the UK "who interact only through digital channels give lower loyalty scores to their insurers". The average net promoter score was almost -10.
  • They are increasingly comfortable with online-only service and are willing to try services that offer better personalization and broader offerings. They are also less interested in agents.
  • Consumers in the UK are also more willing (40%) to provide their insurers with personal and lifestyle data to enhance their service offering on their behalf.

Price Sensitivity

  • PWC research found that "over 90% of UK respondents had used price comparison websites to research options and quotes for their non-life insurance, and that the UK is the most price-sensitive market in our survey — 73% respondents say price is the most important factor when considering non-life insurance products, compared to just 38% in Canada.
  • In essence, insurers consumers using digital channels in the UK are highly price-sensitive and do not hesitate to change their insurer if they can find a better deal online as being able to get a better deal online is a key reason they like purchasing insurance digitally.


Part
08
of nine
Part
08

Psychographic Profile - Insurance Buyers

The insurance buyer in the UK values streamlined processes, added-value services, low prices, family and friends' recommendations, and quality of services. They enjoy going to the movies and keeping fit. UK insurance buyers often purchase various types of insurance products and they learn about new insurance companies and products mostly online and via social media platforms.

Values

  • Insurance buyers value automation of processes, as a survey conducted on UK insurance policyholders by LexisNexis found that 96% of property owners said that their property information should be brought into an automated process for pricing policies.
  • Additionally, 91% indicated their past claims should also be used to automatically price their insurance policies.
  • Likewise, 96% of policyholders stated that the "ability for insurers to automatically pre-fill their property or other information into the application process" was a benefit when searching for an insurance company.
  • UK insurance buyers are increasingly looking for "ways to make their lives easier through streamlined applications and claims processes."
  • Insurance buyers are price conscious as well. In the LexisNexis survey, 81% of homeowners stated that "it would be ‘completely’ or ‘mostly’ acceptable to use their property information to price more accurately."
  • In a Raconteur survey, 22% of UK insurance buyers stated they only stayed with their insurer because the company offered them a lower premium and 19% stayed only because they couldn't get a lower quote with another company.
  • UK insurance buyers value options, as they "want to be able to choose from a good selection of policies at reasonable prices."
  • Family and friends' opinions are valued, as 70% of insurance customers are influenced by recommendations when deciding which insurance product to purchase.
  • In the UK, 76% of insurance buyers are willing to share their personal data if they get more benefits in return and 47% of them are willing to share personal data for more personalized offers.
  • When considering auto insurance, 77% of potential buyers say quality of service is important when selecting an insurance provider.

General Habits

  • Insurance consumers in the UK enjoy going to the movies. This is evident because health insurance providers in the country often use "free or discounted cinema tickets as incentives or rewards for their customers to visit."
  • Health and fitness are two habits associated with UK insurance customers as health insurance companies are increasingly partnering with boutique fitness operators to offer integrated health and wellness opportunities. This is also evident in that "employees in the UK spent an average of £174 per month on wellbeing products in 2018."
  • The wellbeing products purchased by people in the UK include income protection and gym memberships.

Spending Habits

  • UK insurance consumers are willing to pay higher premiums to insurance companies that offer additional services other than insurance and about 80% of UK insurance consumers are open to having insurance companies provide ecosystem services.
  • Insurance buyers in the UK want to purchase services that "suit their lifestyles or are tailored to their businesses."
  • Many people in the UK see buying insurance as a "grudge purchase — something they don't want to spend money on and don't think they are likely to use."
  • Auto insurance is the "most widely held type of insurance" in the UK, but policy holders spend significantly more on purchasing and maintaining their vehicles than they do on insurance.
  • Insurance consumers in the UK purchase travel insurance (7%), private medical insurance (6%), and life insurance (22%).

Media Consumption Habits

  • More than 40% of UK life insurance customers and about 40% of P&C insurance customers use their mobile devices for insurance research and interaction.
  • Over 80% of UK life insurance customers and about 80% of P&C insurance customers have been "digitally active" within the last 12 months.
  • According to a Facebook survey, 63% of UK auto insurance customers find their policy online, compared to 57% of property insurance customers. Another 21% of UK auto insurance customers discover a new policy from television commercials.
  • Insurance consumers in the UK get information from social media accounts as 48% agree that "Facebook and other social platforms are great sources for learning about home insurance."
  • Additionally, 33% see an auto insurance product advertised on social media and are interested in buying it and 44% of them have found new property insurance companies and products on Facebook.
  • Instagram is a widely-used social media channel by UK insurance customers and it continues to grow in popularity.
  • Twitter is an important channel for insurance companies, as consumers turn to this platform for customer service.
  • Millennial insurance customers in the UK use messaging apps, but insurance providers are not taking advantage of this channel as yet.
Part
09
of nine
Part
09

Demographic Profile - Insurance Buyers

An insurance buyer in the United Kingdom (UK) is likely to be an affluent white male from South East in his forties or fifties. The following information presents details about the group.

Age

  • Insurance buyers in the UK are likely to be in the 45-54 age group. The market penetration hits the 50% mark within this cohort, while those between 18 – 24 and those over 85 have the lowest rates.

Gender and Ethnicity

  • Although women make up more than half of the UK population, they are less likely to buy insurance than men. For instance, in 2018, 44% of Aegon’s critical illness claims and 41% of income protection claims were made by women. Moreover, only 31% of life insurance claims were for women.
  • Insurance buyers in the UK are likely to be Caucasian (62%), Indian (16%) or Chinese (16%).

Income and Education

  • Insurance buyers are likely to earn more than £30,000 annually. Insurance adoption is similar for those making between £30,000 to £250,000.
  • The rate is somewhat lower for those in the £15,000-£30,000 group and significantly lower for those below the £15,000 mark. Interestingly, households with income above the £250,000 mark are slightly less likely to acquire insurance as well.
  • Those living in villages in England tend to have higher levels of income and are more likely to use regulated financial advice and buy insurance. Those in Scotland, on the other hand, are more influenced by expectations, confidence and financial attitudes than income.
  • Insurance buyers are likely to have at least a bachelor’s degree.

Location

  • Eighty-two percent of adults living in the UK in 2017 had some sort of insurance, with motor insurance being the most popular. South East and South West are slightly ahead, with 86% and 87% respectively. People living in villages are more likely to buy and have insurance (91%), while people living in core cities are the least likely (72%).
  • Thirty-four million people had some form of insurance in England, 3.6 million in Scotland, 2 million in Wales, and 1.1 million in Northern Ireland. South East is still dominant, with 6 million insurance holders, while London has 4.6 million and North West has 4.5 million.
  • Villages are relevant by the numbers as well, with 6 million insurance buyers. Core cities and large towns account for 8.9 million and 8.6 million respectively.
  • A British home insurance buyer is more likely to live in South East or South West; in fact, 15% of all UK adults with home insurance live in South East. People who live in London or core cities are less likely to buy home insurance than the average, probably due to the high level of renting in the areas.
  • People living in Scotland are more likely to have home insurance (65%) than those in Wales (62%), Northern Ireland (62%) and England (59%).
  • Sixty-five percent of UK adults have no life insurance. The number is even higher in London (72%) and core cities (70%). Overall, people living in urban areas are slightly more likely to buy life insurance (29% vs 26%).
  • People living in small towns and villages are more likely to buy life insurance in the UK, mostly due to higher levels of wealth in the area. Scotland has the highest proportion of adults with life insurance (36%), followed by Northern Ireland (30%), England (27%) and Wales (26%).

Research Strategy

To create a demographic profile of insurance buyers in the UK the research team had to rely on a few assumptions regarding education and ethnicity. Our strategy was as follows:
We commenced our research by looking for a readily available demographic profile. Since we were unable to track a reliable and current source, we set out to create our own by dividing the profile by topic. With this approach, we located age, location, income, and gender. Next, we checked the major insurance providers and their marketing efforts, hoping to locate insights about their target demographics; however, most of what we found was information about channels and market segmentation that were more appropriated for other aspects of this project, or reports behind paywalls.
Hoping to provide some evidence, the research team leveraged the information previously found to determine the missing points. For ethnicity, we used the income data to discover the ethnical groups with the largest representation within the established parameters. For the education level, information about age and income were the determinants factors.
Sources
Sources

From Part 05
Quotes
  • "Smartphone usage in the United Kingdom has increased across all age ranges since 2012, most noticeably among those aged 55-64 years of age. Whereas just 9 percent of those aged 55 to 64 years of age used a smartphone in 2012, that number rose to 71 percent by 2018."
Quotes
  • "Young adults are more likely to multi-task on their smartphones while they commute: 27% of 18-34s engage in at least five online activities while commuting; but only 9% of over-35s do so."
Quotes
  • "Apple has a prestigious brand and extensive retail presence across the UK market. Despite a slight decline from a year ago, Apple’s grip on the UK smartphone market remains fairly tight."
Quotes
  • "In 2022, the share of monthly active smartphone users is projected to reach 79.7% of the total population. This would be an increase of over 16% from 61.71% in 2014."