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Risk Metrics: Consumer Concern for and Acquisition of Insurance for Everyday Risks in the UKTable of Contents
Critical illness and identity theft score highly for both relevance to and concern among consumers The perceived relevance of mobile gadget insurance increased most rapidly between 2007 and 2011... ... with the degree of concern moving up most quickly for the risks associated with bicycle insurance Arguably, children’s health and critical illness insurance are the most ‘under-sold’ forms of cover... ... with breakdown recovery, furniture, garden and jewellery insurance at the other end of the spectrum For 13 of the 40 policy types, packaged or substitute cover is more important than stand-alone cover... ... although five can only ever be acquired in a stand-alone format Purchase of stand-alone cover has increased most strongly for pet insurance... ... and (quite predictably) has fallen most precipitously for credit card payment protection insurance Propensity to take out stand-alone unemployment insurance peaks in the 25-34 age group Extended warranties for computing devices are bought quite evenly across all levels of household income Londoners are more likely to acquire many types of cover than their counterparts elsewhere in the UK... ... especially for policies related to personal health and financial commitments
Scope and rationale Over a half of respondents deem the majority of risk types covered to be relevant to their circumstances... … although, in many cases, little or no published research exists to illustrate consumer behaviour The Risk Metrics research program adds value in four key respects… … and is relevant to a variety of financial and other affinity partners as well as insurance providers Changes relative to the 2007 survey Nine brand new policy types are covered by the latest survey Rounding differences Finaccord Risk Metrics and other consumer research studies focused on the UK UK affinity and partnership marketing publications
Introduction For most of the insurance types investigated, the results for 2011 can be compared with those for 2007 Relevance of underlying risks Insurance types Consumers are most likely to perceive defects to computing devices as a relevant risk... ...with risks related to ownership of a musical instrument emerging as the least relevant Risks associated with ownership of mobile gadgets have seen the greatest rise in perceived relevance Degree of concern caused by underlying risks Insurance types Among the relevant audience, risks to children’s health occasion the highest rates of concern… ... with respondents also showing relatively high concern about their own health and that of their pets Generally speaking, consumers are least concerned about missing events for which they bought a ticket Concern has risen most rapidly for the risks associated with ownership of a bicycle Consumers seem to be less worried about identity theft than they were in 2007 Risks related to home ownership have seen an increase in respondent anxiety Overall policy take-up rates Among all consumers Only breakdown recovery insurance is held by more than a half of all survey participants… … although a further four types of cover have been acquired by more than a third of the sample Tyre insurance registers the weakest overall take-up rate across all consumers The overall take-up rate for pet insurance has advanced most rapidly since 2007... ... although take-up rates for 16 out of 30 forms of cover have fallen back Among consumers for whom underlying risks are relevant 14 of the 40 types of cover considered are held by more than a third of the relevant audience Since 2007, take-up rates for different forms of home emergency cover have tended to move up strongly... ... with those for loan and credit card payment protection cover, as expected, having both declined rapidly Several types of insurance appear under-sold relative to the concern that the related risks cause Stand-alone policy take-up rates Among all consumers Insurance to cover the risks analysed can often by acquired on a packaged basis… ... which is priced at less per policy by insurance underwriters than stand-alone cover Consumers are most likely to acquire breakdown recovery insurance in a stand-alone format... ... whereas purchase protection insurance is only ever available as a packaged concept In terms of their rise in stand-alone take-up rate, two forms of home emergency cover perform well Among consumers for whom underlying risks are relevant Within the relevant audience, the stand-alone take-up rate for musical instrument insurance is much higher There is a stand-alone market, albeit sometimes small, in almost every instance
Introduction Risks related to personal health Children’s health Critical illness Dental expenses Medical or hospital treatment Permanent disability Personal accidents Medical expenses Sports-related accidents Risks related to financial commitments Mortgage payments Loan / car finance payments Credit card payments Bill payments Short-term accident or illness Short-term unemployment Legal expenses Risks related to personal possessions (accidental damage, loss or theft) Bicycles Furniture Gardens, garden plants and garden equipment and furniture Glasses or spectacles Handbags or briefcases Jewellery Event tickets Mobile gadgets Mobile telephones Musical instruments Pets Valuable purchases Risks related to personal possessions (mechanical or technical defects) Audio-visual appliances Computing devices Kitchen appliances Risks related to personal security Cards, keys and personal documents Identity Risks related to home ownership Drainage, plumbing and water supply pipes Electricity supply Gas boilers, gas supply pipes and gas central heating Risks related to car ownership Cars (breakdown) Cars (mechanical / technical defects) Cars (financial shortfall) Cars (MOT failure) Car tyres
Introduction Risks related to personal health Children’s health Critical illness Dental expenses Medical or hospital treatment Permanent disability Personal accidents Medical expenses Sport-related accidents Risks related to financial commitments Mortgage payments Loan / car finance payments Credit card payments Bill payments Short-term accident or illness Short-term unemployment Legal expenses Risks related to personal possessions (accidental damage, loss or theft) Bicycles Furniture Gardens, garden plants and garden equipment and furniture Glasses or spectacles Handbags or briefcases Jewellery Event tickets Mobile gadgets Mobile telephones Musical instruments Pets Valuable purchases Risks related to personal possessions (mechanical or technical defects) Audio-visual appliances Computing devices Kitchen appliances Risks related to personal security Cards, keys and documents Identity Risks related to home ownership Drainage, plumbing and water supply pipes Electricity supply Gas boilers, gas supply pipes and gas central heating Risks related to car ownership Cars (breakdown) Cars (mechanical / technical defects) Cars (financial shortfall) Cars (MOT failure) Car tyres
5.0 APPENDIX Research methodology, sample and structure
0.0 EXECUTIVE SUMMARY Plotting relevance to respondents against degree of concern to respondents reveals considerable variations in the potential for the 40 types of cover analysed Relative to the degree of concern caused by the underlying risks, around 20 out of 40 forms of cover appear ‘under-sold’ For most types of cover, stand-alone purchase is more common than acquisition via a packaged or substitute policy Different types of insurance, warranty and assistance display very different take-up rates by age group Annual household income also has a significant bearing on take-up rates for different insurance, warranty and assistance products For most risk groups, the greater youth and affluence of Londoners produces insurance take-up rates that are higher than elsewhere in the UK 1.0 INTRODUCTION 2.0 RISK OVERVIEW Ranking of insurance types by degree of relevance to respondents, 2011 Ranking of insurance types by change in degree of relevance to consumers, 2007 to 2011 Plot of insurance types by relevance among all consumers in 2011 versus change in relevance from 2007 to 2011 Ranking of insurance groups by change in average degree of relevance to consumers, 2007 to 2011 Ranking of insurance types by degree of concern caused by underlying risks among consumers for whom the risk is relevant, 2011 Ranking of insurance types by change in degree of concern caused by underlying risks among consumers for whom the risk is relevant, 2007 to 2011 Plot of insurance types by degree of concern caused by underlying risks among consumers for whom the risk is relevant in 2011 versus change in degree of concern from 2007 to 2011 Plot of relevance of and degree of concern caused by underlying risks among all consumers, 2011 Ranking of insurance groups by change in degree of concern caused by underlying risks among consumers for whom the risk is relevant, 2007 to 2011 Ranking of insurance types by overall take-up rates among all consumers, 2011 Ranking of insurance types by change in overall take-up rates among all consumers, 2007 to 2011 Plot of insurance types by overall take-up rates among all consumers in 2011 versus change in overall take-up rates from 2007 to 2011 Ranking of insurance types by overall take-up rates among consumers for whom the underlying risks are relevant, 2011 Plot of degree of concern caused by underlying risks and overall insurance take-up rates among consumers for whom the underlying risks are relevant, 2011 38 Ranking of insurance types by overall take-up rates among consumers for whom the underlying risks are relevant, 2007 to 2011 39 Plot of insurance types by overall take-up rates among consumers for whom the underlying risks are relevant in 2011 versus change in overall take-up rates from 2007 to 2011 Ranking of insurance types by take-up rates for stand-alone cover among all consumers, 2011 Ranking of insurance types by change in take-up rates for stand-alone cover among all consumers, 2007 to 2011 Plot of insurance types by stand-alone take-up rates among all consumers in 2011 versus change in stand-alone take-up rates from 2007 to 2011 Ranking of insurance types by take-up rates for stand-alone cover among consumers for whom the underlying risks are relevant, 2011 Plot of consumers for whom the underlying risks are relevant with stand-alone cover and those within the same group with packaged / substitute cover, 2011 Ranking of insurance types by change in take-up rates for stand-alone cover among consumers for whom the underlying risks are relevant, 2007 to 2011 Plot of insurance types by stand-alone take-up rates among consumers for whom the underlying risks are relevant in 2011 versus change in stand-alone take-up rates from 2007 to 2011 3.0 RISK ANALYSIS Children’s health: level of concern and degree of relevance to respondents, 2011 Children’s health insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Critical illness: level of concern and degree of relevance to respondents, 2011 Critical illness insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Dental expenses: level of concern and degree of relevance to respondents, 2011 Dental insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Medical or hospital treatment: level of concern and degree of relevance to respondents, 2011 Health / hospital cash plans: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Permanent disability: level of concern and degree of relevance to respondents, 2011 Long-term income protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Personal accidents: level of concern and degree of relevance to respondents, 2011 Personal accident insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Medical expenses: level of concern and degree of relevance to respondents, 2011 Private medical insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Sports-related accidents: level of concern and degree of relevance to respondents, 2011 Sports accident insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Mortgage payments: level of concern and degree of relevance to respondents, 2011 Mortgage term life / mortgage payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Loan / car finance payments: level of concern and degree of relevance to respondents, 2011 Loan payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Credit card payments: level of concern and degree of relevance to respondents, 2011 Credit card payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Bill payments: level of concern and degree of relevance to respondents, 2011 Bill payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Short-term accident or illness: level of concern and degree of relevance to respondents, 2011 Short-term income protection insurance (covering accident and / or illness): respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Short-term unemployment: level of concern and degree of relevance to respondents, 2011 Short-term income protection insurance (covering unemployment): respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Legal expenses: level of concern and degree of relevance to respondents, 2011 Legal expenses insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to or loss or theft of bicycles: level of concern and degree of relevance to respondents, 2011 Bicycle insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage or defects to furniture: level of concern and degree of relevance to respondents, 2011 Furniture insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to gardens and accidental damage to or theft of garden plants, equipment or furniture: level of concern and degree of relevance to respondents, 2011 Garden insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to or loss or theft of glasses or spectacles: level of concern and degree of relevance to respondents, 2011 Glasses / spectacles insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to or loss or theft of handbags or briefcases: level of concern and degree of relevance to respondents, 2011 Handbag / briefcase insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to or loss or theft of jewellery: level of concern and degree of relevance to respondents, 2011 Jewellery insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Inability to attend an event: level of concern and degree of relevance to respondents, 2011 Missed event / ticket cancellation insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to or loss or theft of mobile gadgets: level of concern and degree of relevance to respondents, 2011 Mobile gadget insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to or loss or theft of mobile telephones: level of concern and degree of relevance to respondents, 2011 Mobile telephone insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Accidental damage to or loss or theft of musical instruments: level of concern and degree of relevance to respondents, 2011 Musical instrument insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Veterinary expenses associated with ownership of pets: level of concern and degree of relevance to respondents, 2011 Pet insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Pet insurance: respondent penetration rates split between owners of cats, dogs and other animals, 2011 Accidental damage to or loss or theft of any kind of high value purchase: level of concern and degree of relevance to respondents, 2011 Purchase protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Mechanical or technical defects to audio-visual appliances: level of concern and degree of relevance to respondents, 2011 Extended warranties for audio-visual appliances: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Mechanical or technical defects to computing devices: level of concern and degree of relevance to respondents, 2011 Extended warranties for computing devices: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Mechanical or technical defects to kitchen appliances: level of concern and degree of relevance to respondents, 2011 Extended warranties for kitchen appliances: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Loss or theft of cards, keys or valuable documents: level of concern and degree of relevance to respondents, 2011 Card protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Identity theft: level of concern and degree of relevance to respondents, 2011 Identity protection insurance / assistance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Drainage, plumbing and water supply pipe emergencies or faults: level of concern and degree of relevance to respondents, 2011 Drainage / plumbing / water supply pipe insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Electrical emergencies or faults: level of concern and degree of relevance to respondents, 2011 Electrical emergency and breakdown insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Gas boiler, gas supply pipe or gas central heating emergencies or faults: level of concern and degree of relevance to respondents, 2011 Gas boiler / gas supply pipe / gas central heating insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Car breakdown: level of concern and degree of relevance to respondents, 2011 Breakdown recovery insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Mechanical or technical defects to cars: level of concern and degree of relevance to respondents, 2011 Extended warranties for cars: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Financial shortfall associated with ownership of cars: level of concern and degree of relevance to respondents, 2011 GAP / shortfall protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 MOT failure: level of concern and degree of relevance to respondents, 2011 MOT insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 Punctures or other damage to tyres: level of concern and degree of relevance to respondents, 2011 Tyre insurance: respondent penetration rates split between stand-alone purchase and packaged cover, 2011 4.0 SEGMENT ANALYSIS Children’s health: level of concern and degree of relevance split by respondent segment, 2011 Children’s health insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Critical illness: level of concern and degree of relevance split by respondent segment, 2011 Critical illness insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Dental expenses: level of concern and degree of relevance split by respondent segment, 2011 Dental insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Medical or hospital treatment: level of concern and degree of relevance split by respondent segment, 2011 Health / hospital cash plans: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Permanent disability: level of concern and degree of relevance split by respondent segment, 2011 Long-term income protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Personal accidents: level of concern and degree of relevance split by respondent segment, 2011 Personal accident insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Medical expenses: level of concern and degree of relevance split by respondent segment, 2011 Private health insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Sport-related accidents: level of concern and degree of relevance split by respondent segment, 2011 Sports accident insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Mortgage payments: level of concern and degree of relevance split by respondent segment, 2011 Mortgage life / mortgage payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Loan / car finance payments: level of concern and degree of relevance split by respondent segment, 2011 Loan payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Credit card payments: level of concern and degree of relevance split by respondent segment, 2011 Credit card payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Bill payments: level of concern and degree of relevance split by respondent segment, 2011 Bill payment protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Short-term accident or illness: level of concern and degree of relevance split by respondent segment, 2011 Short-term income protection insurance (covering accident and / or illness): respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Short-term unemployment: level of concern and degree of relevance split by respondent segment, 2011 Short-term income protection insurance (covering unemployment): respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Legal expenses: level of concern and degree of relevance split by respondent segment, 2011 Legal expenses insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of bicycles: level of concern and degree of relevance split by respondent segment, 2011 Bicycle insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage or defects to furniture: level of concern and degree of relevance split by respondent segment, 2011 Furniture insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to gardens and accidental damage to or theft of garden plants, equipment or furniture: level of concern and degree of relevance split by respondent segment, 2011 Garden insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of glasses or spectacles: level of concern and degree of relevance split by respondent segment, 2011 Glasses / spectacles insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of handbags or briefcases: level of concern and degree of relevance split by consumer, 2011 segment, 2011 Handbag / briefcase insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of jewellery: level of concern and degree of relevance split by respondent segment, 2011 Jewellery insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Inability to attend an event: level of concern and degree of relevance split by respondent segment, 2011 Missed event / ticket cancellation insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of mobile gadgets: level of concern and degree of relevance split by respondent segment, 2011 Mobile gadget insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of mobile telephones: level of concern and degree of relevance split by respondent segment, 2011 Mobile telephone insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of musical instruments: level of concern and degree of relevance split by respondent segment, 2011 Musical instrument insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Veterinary expenses associated with ownership of pets: level of concern and degree of relevance split by respondent segment, 2011 Pet insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Accidental damage to or loss or theft of any kind of high value purchase: level of concern and degree of relevance split by respondent segment, 2011 Purchase protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Mechanical or technical defects to audio-visual appliances: level of concern and degree of relevance split by respondent segment, 2011 Extended warranties for audio-visual appliances: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Mechanical or technical defects to computing devices: level of concern and degree of relevance split by respondent segment, 2011 2 Extended warranties for computing devices: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Mechanical or technical defects to kitchen appliances: level of concern and degree of relevance split by respondent segment, 2011 Extended warranties for kitchen appliances: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Loss or theft of cards, keys or valuable documents: level of concern and degree of relevance split by respondent segment, 2011 Card protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Identity theft: level of concern and degree of relevance split by respondent segment, 2011 Identity theft insurance / assistance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Drainage, plumbing or water supply pipe emergencies or faults: level of concern and degree of relevance split by respondent segment, 2011 Drainage / plumbing / water supply pipe insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Electrical emergencies or faults: level of concern and degree of relevance split by respondent segment, 2011 Electrical emergency and breakdown insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Gas boiler, gas supply pipe or gas central heating emergencies or faults: level of concern and degree of relevance split by respondent segment, 2011 Gas boiler / gas supply pipe / gas central heating insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Car breakdown: level of concern and degree of relevance split by respondent segment, 2011 Breakdown recovery insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Mechanical or technical defects to cars: level of concern and degree of relevance split by respondent segment, 2011 Extended warranties for cars: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Financial shortfall associated with ownership of cars: level of concern and degree of relevance split by respondent segment, 2011 GAP / shortfall protection insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 MOT failure: level of concern and degree of relevance split by respondent segment, 2011 MOT insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 Punctures or other damage to tyres: level of concern and degree of relevance split by respondent segment, 2011 Tyre insurance: respondent penetration rates split between stand-alone purchase and packaged cover and by respondent segment, 2011 5.0 APPENDIX Sample breakdown by age group and annual household income Sample breakdown by geography and type of bank account held |
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