The steady price deflation in the home insurance market was promptly reversed in January, with premiums rising by 9.1% between December 2021 and January 2022.
The jump seems to have been a one-off step change to new business premiums to ensure compliance with the new dual pricing ban. February saw some adjustments to brands’ initial pricing changes as many found they had over- or under-estimated market-level inflation when planning their own changes.
Not all providers were affected by the new regulations equally. Those with larger back books with longer tenure customers face the biggest challenge and have had to increase new business pricing more significantly compared to those with smaller back books.
This has changed the shape of the top five most competitive brands for buildings and contents insurance.
Policy Expert has remained a constant feature, appearing in R1-5 positions for more than half of new business quotes on PCWs. But it’s been all change underneath.
In its financial results announcement, Admiral flagged “we are successfully scaling UK Household, reaching 1.3 million customers.” That’s a strong position for an established brand without a huge home back book.
Admiral has indeed steadily increased its share of R1-5s on PCWs, from 17% in December to 21% in January and 24% in February. One imagines their conversion from that position is high, based on brand strength and the customer trust so well established in motor. [link to awards]
Ardonagh/Atlanta’s tiering and pricing of its Swinton brand has made Swinton Essential the second most prolific brand on PCWs. It was the ninth most competitive brand with 9.9% R1-5 quotes in December, a figure which has doubled to a steady c.20% in January and February.
The new regulation presents an opportunity for new players, too. Urban Jungle stands out here as an early mover. It only launched buildings & contents insurance in June last year and is now the third most competitive brand on PCWs.
The start-up is most competitive for smaller properties, in line with its target market of first time buyers, and delivered as many as 41% of R1-5 quotes for two bedroom properties in February. It also has a strong London preference, offering R1-5 quotes to nearly half of Londoners looking for home insurance in February.
While the average new business premium for Londoners is the highest at £221 in January, Londoners saw the smallest quarterly price increase of all the regions, likely in part down to Urban Jungle’s efforts in the city.
Admiral, too, is very competitive for two bedroom properties but its appetite goes all the way through to 6+ bedrooms, where it appears in a T5 position for a quarter of quotes. It seems to be steering clear of London, however, 11% R1-5 quotes in the capital compared with 35% in the North East, on one PCW.
Policy Expert was most competitive for 4 and 5 bedroom properties and least keen on London out of all the regions. It, too, was the least keen on London out of all the regions, and the most competitive in Yorkshire and The Humber.
Urban Jungle doesn’t quote for 6+ bedroom properties at present, nor does Policy Expert.
Age gap
Another element of our pricing index showed how prices have risen more for homeowners aged over 50. It’s not a big surprise to see this, given that’s the area where many brands have the biggest gap between new and renewal customer pricing.
Those older homeowners who do shop around are likely to find Admiral hoping to persuade them to join at renewal. It provided 44% of Rank 1-5 quotes for over 65s in February and was also top of the leader board for over 60s. By contrast, Swinton is most heavily courting customers aged 30-34 and Policy Expert dominating everyone in between.
Whether Urban Jungle’s presence in the top 5 is here to stay remains to be seen. What seems likely is that we will see other new brands join them over the next 12 months while established players remain more constrained by protecting their back book pricing.
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