Pace of change picks up in home insurance market

A change in pricing strategies prompted by GIPP, the FCA’s pricing reforms that banned price walking, has led to acceleration in growth from some of the market’s newer brands and a focus on retention from those with a larger back book.

Our Insurance Behaviour Tracker which records the renewal journeys of 2,000 customers each month shows just which brands are building their market share in these times of change.

Here are some of the highlights:

The biggest brands for absolute gain

Policy Expert made the largest strides in our momentum measure, adding 1.3% of the total market to its customer count, and more than twice its gain for the previous six months.

These figures cover the six months to 31 March 2022 and therefore pre-date the announcement of it changing capacity providers from QIC to R&Q subsidiary Accredited Insurance. A six-year deal announced in May stated the intention to “significantly expand on our current position with over 1 million home and motor policyholders” and continue the momentum of recent years.

Aviva came next with its PCW presence continuing to convert well into market share gain, followed by LV= which has also benefitted from the migration of L&G customers at renewal and a renewed PCW push.

The latest figures are also notable for the pace of growth at the top of the table, with three brands in total gaining more than 1% of the market in six months alone compared with just one in the previous period.

Opportunity knocks

There may be fewer customers shopping around at renewal, but the dynamic younger players and bigger motor brands eyeing an opportunity to grow their home books have picked up the pace.

One Call increased its customer count by 30%, following a 4.3% gain in the previous six months. Admiral grew its book in relative terms by 13.8% - not enough for a top 10 position but a solid performance for an already established provider.

Fastest for book growth

Sainsbury’s Bank has made consistent gains and has entered the top 10 for absolute market share for the first time, pushing out Nationwide.

Its annual report, published in June, detailed that new business sales had increased by 15% for home, fuelled by new panel members and greater use of Nectar data in its pricing. This followed investment in its acquisition platforms the previous year to improve payment functionality, live chat and integrate Nectar into the customer journey. It all meant that when people started moving house again, stimulating more new business opportunities, Sainsbury’s proposition was ready for it.

Retention rising

More customers renewed their insurance with their current provider in the latest period, with the market average retention rate rising from 63.2% to 66.9% in the last 12 months.

The top four brands for retention were absent from the top table for market share gain, emphasising again the divergence of strategies between companies focused on renewal and those focus on new business since the FCA’s pricing reforms.

Policy Expert merits attention here for improving its retention, moving from market average (6 m/e March 2021: 63.6%) to market beating (6 m/e March 2022: 73.9%)

Top 10 for retention

It all means that Aviva has consolidated the position of its main brand at the top of the table, albeit concentrating its efforts in this area over online only QuoteMeHappy which has shrunk modestly.

In Group terms, however, Direct Line Group remains the largest. Its brands including Churchill and Privilege delivering an 11% share of market.

Market share post renewal

Understand consumer behaviour throughout the renewal process

Enhance decision making, performance monitoring and planning by understanding consumer behaviours, attitudes and intentions at insurance renewal.

Insurance Behaviour Tracker (IBT) is the most comprehensive insurance focused consumer survey in the market. It provides insight and understanding of consumer behaviour throughout the renewal process, giving you a view of market trends, and brand performance. This will enable you to make informed decisions to allow you to build robust marketing and business plans and track results.