Studie - UK High Value Home Insurance 2010
Datamonitor
4 / 2010
57 Seiten
| Typ: | Studie |
| Sprache: | Englisch |
| Regionen: | Vereinigtes Königreich |
| Verfügbarkeit: | verfügbar |
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Introduction
UK High Value Home Insurance 2010 presents a detailed examination of the high value home insurance market. It contains an analysis of the current state of the market by looking at total market growth, profitability, claims, competitive forces and a forecast for the total number of UK affluents and the total market in gross written premiums.
Scope
*Information and data on the attractiveness of the UK high value home insurance market
*Data on historical and forecasted numbers of UK affluents.
*An insight into affluent purchasing trends, preferences and investment strategies.
Highlights
Datamonitor has estimated that there were 661,000 high value home insurance policies in force in 2009. Around 531,000 of these policies were for mid net worth individuals and 58,000 for high net worth's.
This market is plagued by large losses which are largely weather or escape of water related (for all household claims, escape of water accounted for 35% of the total claims bill). In a non-event yearwhere there are no large losses caused by a weather eventthe market combined operating ratio (COR) should be around 90%.
A recurring theme that emerged throughout primary interviews was that less complex risks will continue to see a move towards direct distribution because it is easier to underwrite for these types of risks. However, clients with complex risks will continue to use brokers which can tailor a bespoke policy.
Reasons to Purchase
*Understand how high value home insurance players view this market at present.
*Get to grips with the size of the market and how it is anticipated to grow in the future.
*Realize how distribution of high value home insurance policies will change based on different purchasing patterns.
UK High Value Home Insurance 2010 presents a detailed examination of the high value home insurance market. It contains an analysis of the current state of the market by looking at total market growth, profitability, claims, competitive forces and a forecast for the total number of UK affluents and the total market in gross written premiums.
Scope
*Information and data on the attractiveness of the UK high value home insurance market
*Data on historical and forecasted numbers of UK affluents.
*An insight into affluent purchasing trends, preferences and investment strategies.
Highlights
Datamonitor has estimated that there were 661,000 high value home insurance policies in force in 2009. Around 531,000 of these policies were for mid net worth individuals and 58,000 for high net worth's.
This market is plagued by large losses which are largely weather or escape of water related (for all household claims, escape of water accounted for 35% of the total claims bill). In a non-event yearwhere there are no large losses caused by a weather eventthe market combined operating ratio (COR) should be around 90%.
A recurring theme that emerged throughout primary interviews was that less complex risks will continue to see a move towards direct distribution because it is easier to underwrite for these types of risks. However, clients with complex risks will continue to use brokers which can tailor a bespoke policy.
Reasons to Purchase
*Understand how high value home insurance players view this market at present.
*Get to grips with the size of the market and how it is anticipated to grow in the future.
*Realize how distribution of high value home insurance policies will change based on different purchasing patterns.
Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Recent market growth has been driven by increased penetration and various rate increases 2
Underinsurance is still a big issue for this market 2
Some enhanced standard home insurance policies are taking business away from the specialist sector 2
With the numbers of affluents expected to grow in the future, there is plenty of new business to be won 2
Insurers can make good returns from high value home insurance 2
A typical non-event year should produce a combined ratio of 90% 2
The threat of new entrants coming into the higher end of the market is low 3
Some players are increasing rates in order to improve underwriting profits 3
The future of the high value sector will be characterized by divergence in distribution 3
MNW home insurance policies are likely to be sold direct while HNWs will continue to use brokers 3
The total market will see moderate growth as a result of new business generation 3
Table of Contents 4
Table of Figures 5
Table of Tables 6
Market Context 7
Introduction 7
High value home insurance products offer superior service and wide coverage 7
Wealthy individuals need enhanced insurance protection due to their greater value of assets 7
There is no industry-wide definition of MNW and HNW individuals 7
Segmenting MNW and HNW customers is vital for targeting new business 7
Most high value policies available on the market start from £50,000 contents sums insured 9
The total market continues to grow despite the downturn 10
The UK high value home insurance market is estimated to be worth £574m in gross written premiums 10
Datamonitor estimates that there were 589,000 high value policies in force during 2009, up by 1.9% on 2008 11
The total potential market could be worth anything up to £1.9 billion in GWP 11
Penetration is increasing, albeit at a slowing rate, but underinsurance still plagues this market 11
Greater direct advertising, cross-selling, appraisals and partnerships will help improve penetration 11
Hiscox is the only insurer which has a high profile, high value home insurance advertising campaign 12
Enhanced standard home insurance policies are a threat to the MNW market 13
Customers, especially MNW individuals, are becoming increasingly price-sensitive 14
Providers need to promote the benefits of high value products to prevent business being lost to enhanced standard home insurance policies 14
The number of wealthy individuals grew in 2009 by 8.1% to reach 8.2 million 14
Most high net worth individuals are aged between 31 and 50 16
A large number of affluents are moving their investments back into equities 17
Art, gold and collectibles have also become popular investments 18
Insurers can make good returns from high value home insurance 19
HNW risks are more profitable than MNW 19
Insurers can generate attractive returns in the high value home insurance sector 19
Underwriting is becoming more rigorous in order to select the most profitable risks 21
Rate increases by a number of insurers may become the norm for the next year or two 21
There are significant barriers to entry in this market, especially for HNW and UHNW offerings 22
Escape of water continues to be the number one cause of claims 22
Escape of water claims accounted for 35% of all household claims during the first three quarters of 2009 23
The latest crime statistics show a modest rise in cheque and credit card fraud which may influence claims 24
Some HNW insurers are noticing a marginal rise of aggravated burglary against their clients 26
Home & Legacy has partnered with SmartWater in a bid to deter theft-related crime 26
Many believe that insurers need to invest more into improving the claims service 26
The market for loss recovery specialists is growing due to the strong emphasis on claims service quality 26
The threat of inflation throughout 2010 will raise contents claims costs 27
The Floods and Water Management Bill is becoming closer to reality, which should help lower claims costs 28
Distribution 30
Introduction 30
Brokers are the principle route to market for MNW and HNW home insurance products 30
National and regional brokers are the most important distribution channel 30
The majority of mass market household insurance policies are distributed by banks and building societies 30
Affinity partnerships, often with retail banks, are a popular route to market 30
Call centers are a useful way of dealing with clients' queries and MNW product distribution 31
The broker channel is at risk of losing commoditized MNW business to direct insurers 31
Market sentiment is that MNW risks are far easier to sell direct compared to HNW and UHNW clients 31
Direct online offerings are important for attracting the next generation of emerging affluents 31
However, younger individuals are more likely to switch insurance provider 31
Price comparison websites are a way of capturing data that can be used to sell MNW policies online 32
To prevent becoming obsolete in the MNW market, brokers need to work closer with insurers 33
Some have argued that insurers should provide brokers with better resources, although this is unlikely 33
Brokers should aim to target commercial accounts in order to retain and grow business 34
Better client relationship management will undoubtedly help improve client retention 34
Insurers may purchase brokers instead of investing into a direct offering 35
Competitive Dynamics 36
Introduction 36
Most policies available on the market are tailored towards MNW individuals 36
Chubb and Hiscox are the market leaders in the high value home insurance market 38
Both Chubb and Hiscox have sustained their positions as the two largest underwriters 38
Hiscox underwrites high value home insurance via its '505' and '606' policy schedules 38
Chubb's 'Masterpiece' home insurance product range offers a wide range of features and benefits 39
The remainder of the market is characterized by insurers of smaller but similar respective sizes 39
Sterling is one of few MNW and HNW specialist insurers in the market 40
Chartis has significantly expanded its presence in this market since entering back in 2003 40
The market as a whole is characterized by composites and specialist insurers 41
Numerous different regional and national brokers exist in this market 42
2009 saw many new deals and competitor developments 43
Providers are constantly innovating and looking for new business opportunities 43
Synergy Private Clients entered the market in late 2008 43
Fortis is making moves to expand its presence in the MNW market 43
Marsh acquired HSBC Insurance Brokers in December 2009 43
Oak and Plum Underwriting have partnered to offer brokers a full range of MNW and HNW cover 44
Home & Legacy launched three new household insurance products early in 2009 44
Home & Legacy is now on the panel for the broker network Keychoice 44
MNW 'quote and buy' facilities are becoming increasingly popular in order to speed up underwriting 44
Home & Legacy now offers online quote and buy for its MNW clients 45
Plum Underwriting currently provide an online quote and buy facility for brokers to access Lloyd's capacity 45
Chubb's new broker website 'Masterpiece24' provides brokers with a quote and bind system for HNW cover 45
Castle Cover launched a new HNW website called Regal Insurance which offers online purchasing 45
The Future Decoded 47
The MNW and HNW market will experience a divergence in distribution and premium rates 47
MNW home insurance policies are likely to be sold direct while HNWs will continue to use brokers 47
It is possible that the MNW market will become more defined as a segment 47
Insurers will continue to remain competitive for clean risks, but premiums will increase for risky clients 47
The market will grow to reach £694m in gross written premiums by 2014 48
The total market will see moderate growth as a result of new business generation 48
The numbers of UK wealthy individuals will increase significantly to 12.4m by 2014 50
APPENDIX 52
Data tables 52
Definitions 53
Combined ratio 53
Composite insurer 53
Gross premium 53
London insurance market 53
Managing general agent 53
Mid-net worth (mass affluent) 53
Mass market 53
High net worth 53
Liquid assets (or liquid wealth) 54
Onshore 54
Written premiums 54
Methodology 54
Primary and secondary research 54
High value home insurance market sizing 54
Wealth Management Market Leaders Survey 2010 55
Datamonitor's Global Wealth Model 55
The UK sub-model 55
Wealth model forecasting methodology 55
Datamonitor's wealth numbers compared with other wealth numbers 56
Further reading 56
Ask the analyst 56
Datamonitor consulting 56
Disclaimer 57
List of Tables
Table 1: Total number of UK affluents measured by onshore liquid wealth, 2005-09e (000s) 16
Table 2: Hiscox and Sterling ratios, 2005-08 (%) 21
Table 3: UK household insurance claims by peril, 2004-Q3 2009 (£m) 24
Table 4: Selected number of offences from the British Crime Survey, 2004/05-2008/09 25
Table 5: Mid and high net worth products 37
Table 6: Key drivers affecting UK MNW and HNW home insurance GWP, 2010f-14f 48
Table 7: UK high value home insurance market GWP, 2009e-14f (£m) 49
Table 8: Forecast for the number of UK affluents, 2009e-14f (000s) 51
Table 9: UK inflation rate as measured by the CPI and RPI, June 2008-December 2009 (%) 52
List of Figures
Figure 1: Defining MNW and HNW policies 8
Figure 2: MNW policies start at around £50,000 of contents while HNW policies start between £150,000 and £250,000 9
Figure 3: Two thirds of the high value home insurance market is accounted for by MNW GWP in 2009 10
Figure 4: Hiscox's advertising campaign has raised the profile of high value home insurance 13
Figure 5: The number of UK affluents grew in 2009, after falling significantly in 2008 15
Figure 6: Most UK-based HNWs are relatively young 17
Figure 7: Almost half of all HNW investment portfolios are invested into equities 18
Figure 8: Insurers can earn high returns from high value home insurance 20
Figure 9: 2009 will be a record year for escape of water claims 23
Figure 10: Generally crime has fallen, although fraudulent activities may continuing rising 25
Figure 11: Lorega is leading the way for loss recovery insurance 27
Figure 12: 2009 was characterized by falling inflation which in turn lowered home contents claims costs 28
Figure 13: Example of how price comparison sites could be used to capture customers 33
Figure 14: Hiscox is the number one high value home insurance underwriter 38
Figure 15: Chubb offers three main specialist high value household insurance policies 39
Figure 16: Hiscox and Chubb are the largest underwriters active in the high value home insurance market 41
Figure 17: Composites and specialist insurers are both active in the MNW and HNW home insurance market 42
Figure 18: Regal's online offering seeks entice more HNWs into making online quotes 46
Figure 19: The high value home insurance market will experience an average growth of 3.9% up to 2014 49
Figure 20: The numbers of UK MNW and HNW individuals will experience year-on-year growth 50
Catalyst 1
Summary 1
Executive Summary 2
Recent market growth has been driven by increased penetration and various rate increases 2
Underinsurance is still a big issue for this market 2
Some enhanced standard home insurance policies are taking business away from the specialist sector 2
With the numbers of affluents expected to grow in the future, there is plenty of new business to be won 2
Insurers can make good returns from high value home insurance 2
A typical non-event year should produce a combined ratio of 90% 2
The threat of new entrants coming into the higher end of the market is low 3
Some players are increasing rates in order to improve underwriting profits 3
The future of the high value sector will be characterized by divergence in distribution 3
MNW home insurance policies are likely to be sold direct while HNWs will continue to use brokers 3
The total market will see moderate growth as a result of new business generation 3
Table of Contents 4
Table of Figures 5
Table of Tables 6
Market Context 7
Introduction 7
High value home insurance products offer superior service and wide coverage 7
Wealthy individuals need enhanced insurance protection due to their greater value of assets 7
There is no industry-wide definition of MNW and HNW individuals 7
Segmenting MNW and HNW customers is vital for targeting new business 7
Most high value policies available on the market start from £50,000 contents sums insured 9
The total market continues to grow despite the downturn 10
The UK high value home insurance market is estimated to be worth £574m in gross written premiums 10
Datamonitor estimates that there were 589,000 high value policies in force during 2009, up by 1.9% on 2008 11
The total potential market could be worth anything up to £1.9 billion in GWP 11
Penetration is increasing, albeit at a slowing rate, but underinsurance still plagues this market 11
Greater direct advertising, cross-selling, appraisals and partnerships will help improve penetration 11
Hiscox is the only insurer which has a high profile, high value home insurance advertising campaign 12
Enhanced standard home insurance policies are a threat to the MNW market 13
Customers, especially MNW individuals, are becoming increasingly price-sensitive 14
Providers need to promote the benefits of high value products to prevent business being lost to enhanced standard home insurance policies 14
The number of wealthy individuals grew in 2009 by 8.1% to reach 8.2 million 14
Most high net worth individuals are aged between 31 and 50 16
A large number of affluents are moving their investments back into equities 17
Art, gold and collectibles have also become popular investments 18
Insurers can make good returns from high value home insurance 19
HNW risks are more profitable than MNW 19
Insurers can generate attractive returns in the high value home insurance sector 19
Underwriting is becoming more rigorous in order to select the most profitable risks 21
Rate increases by a number of insurers may become the norm for the next year or two 21
There are significant barriers to entry in this market, especially for HNW and UHNW offerings 22
Escape of water continues to be the number one cause of claims 22
Escape of water claims accounted for 35% of all household claims during the first three quarters of 2009 23
The latest crime statistics show a modest rise in cheque and credit card fraud which may influence claims 24
Some HNW insurers are noticing a marginal rise of aggravated burglary against their clients 26
Home & Legacy has partnered with SmartWater in a bid to deter theft-related crime 26
Many believe that insurers need to invest more into improving the claims service 26
The market for loss recovery specialists is growing due to the strong emphasis on claims service quality 26
The threat of inflation throughout 2010 will raise contents claims costs 27
The Floods and Water Management Bill is becoming closer to reality, which should help lower claims costs 28
Distribution 30
Introduction 30
Brokers are the principle route to market for MNW and HNW home insurance products 30
National and regional brokers are the most important distribution channel 30
The majority of mass market household insurance policies are distributed by banks and building societies 30
Affinity partnerships, often with retail banks, are a popular route to market 30
Call centers are a useful way of dealing with clients' queries and MNW product distribution 31
The broker channel is at risk of losing commoditized MNW business to direct insurers 31
Market sentiment is that MNW risks are far easier to sell direct compared to HNW and UHNW clients 31
Direct online offerings are important for attracting the next generation of emerging affluents 31
However, younger individuals are more likely to switch insurance provider 31
Price comparison websites are a way of capturing data that can be used to sell MNW policies online 32
To prevent becoming obsolete in the MNW market, brokers need to work closer with insurers 33
Some have argued that insurers should provide brokers with better resources, although this is unlikely 33
Brokers should aim to target commercial accounts in order to retain and grow business 34
Better client relationship management will undoubtedly help improve client retention 34
Insurers may purchase brokers instead of investing into a direct offering 35
Competitive Dynamics 36
Introduction 36
Most policies available on the market are tailored towards MNW individuals 36
Chubb and Hiscox are the market leaders in the high value home insurance market 38
Both Chubb and Hiscox have sustained their positions as the two largest underwriters 38
Hiscox underwrites high value home insurance via its '505' and '606' policy schedules 38
Chubb's 'Masterpiece' home insurance product range offers a wide range of features and benefits 39
The remainder of the market is characterized by insurers of smaller but similar respective sizes 39
Sterling is one of few MNW and HNW specialist insurers in the market 40
Chartis has significantly expanded its presence in this market since entering back in 2003 40
The market as a whole is characterized by composites and specialist insurers 41
Numerous different regional and national brokers exist in this market 42
2009 saw many new deals and competitor developments 43
Providers are constantly innovating and looking for new business opportunities 43
Synergy Private Clients entered the market in late 2008 43
Fortis is making moves to expand its presence in the MNW market 43
Marsh acquired HSBC Insurance Brokers in December 2009 43
Oak and Plum Underwriting have partnered to offer brokers a full range of MNW and HNW cover 44
Home & Legacy launched three new household insurance products early in 2009 44
Home & Legacy is now on the panel for the broker network Keychoice 44
MNW 'quote and buy' facilities are becoming increasingly popular in order to speed up underwriting 44
Home & Legacy now offers online quote and buy for its MNW clients 45
Plum Underwriting currently provide an online quote and buy facility for brokers to access Lloyd's capacity 45
Chubb's new broker website 'Masterpiece24' provides brokers with a quote and bind system for HNW cover 45
Castle Cover launched a new HNW website called Regal Insurance which offers online purchasing 45
The Future Decoded 47
The MNW and HNW market will experience a divergence in distribution and premium rates 47
MNW home insurance policies are likely to be sold direct while HNWs will continue to use brokers 47
It is possible that the MNW market will become more defined as a segment 47
Insurers will continue to remain competitive for clean risks, but premiums will increase for risky clients 47
The market will grow to reach £694m in gross written premiums by 2014 48
The total market will see moderate growth as a result of new business generation 48
The numbers of UK wealthy individuals will increase significantly to 12.4m by 2014 50
APPENDIX 52
Data tables 52
Definitions 53
Combined ratio 53
Composite insurer 53
Gross premium 53
London insurance market 53
Managing general agent 53
Mid-net worth (mass affluent) 53
Mass market 53
High net worth 53
Liquid assets (or liquid wealth) 54
Onshore 54
Written premiums 54
Methodology 54
Primary and secondary research 54
High value home insurance market sizing 54
Wealth Management Market Leaders Survey 2010 55
Datamonitor's Global Wealth Model 55
The UK sub-model 55
Wealth model forecasting methodology 55
Datamonitor's wealth numbers compared with other wealth numbers 56
Further reading 56
Ask the analyst 56
Datamonitor consulting 56
Disclaimer 57
List of Tables
Table 1: Total number of UK affluents measured by onshore liquid wealth, 2005-09e (000s) 16
Table 2: Hiscox and Sterling ratios, 2005-08 (%) 21
Table 3: UK household insurance claims by peril, 2004-Q3 2009 (£m) 24
Table 4: Selected number of offences from the British Crime Survey, 2004/05-2008/09 25
Table 5: Mid and high net worth products 37
Table 6: Key drivers affecting UK MNW and HNW home insurance GWP, 2010f-14f 48
Table 7: UK high value home insurance market GWP, 2009e-14f (£m) 49
Table 8: Forecast for the number of UK affluents, 2009e-14f (000s) 51
Table 9: UK inflation rate as measured by the CPI and RPI, June 2008-December 2009 (%) 52
List of Figures
Figure 1: Defining MNW and HNW policies 8
Figure 2: MNW policies start at around £50,000 of contents while HNW policies start between £150,000 and £250,000 9
Figure 3: Two thirds of the high value home insurance market is accounted for by MNW GWP in 2009 10
Figure 4: Hiscox's advertising campaign has raised the profile of high value home insurance 13
Figure 5: The number of UK affluents grew in 2009, after falling significantly in 2008 15
Figure 6: Most UK-based HNWs are relatively young 17
Figure 7: Almost half of all HNW investment portfolios are invested into equities 18
Figure 8: Insurers can earn high returns from high value home insurance 20
Figure 9: 2009 will be a record year for escape of water claims 23
Figure 10: Generally crime has fallen, although fraudulent activities may continuing rising 25
Figure 11: Lorega is leading the way for loss recovery insurance 27
Figure 12: 2009 was characterized by falling inflation which in turn lowered home contents claims costs 28
Figure 13: Example of how price comparison sites could be used to capture customers 33
Figure 14: Hiscox is the number one high value home insurance underwriter 38
Figure 15: Chubb offers three main specialist high value household insurance policies 39
Figure 16: Hiscox and Chubb are the largest underwriters active in the high value home insurance market 41
Figure 17: Composites and specialist insurers are both active in the MNW and HNW home insurance market 42
Figure 18: Regal's online offering seeks entice more HNWs into making online quotes 46
Figure 19: The high value home insurance market will experience an average growth of 3.9% up to 2014 49
Figure 20: The numbers of UK MNW and HNW individuals will experience year-on-year growth 50
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