Channel Metrics: Consumer Distribution Trends in UK Insurance

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Information about Channel Metrics: Consumer Distribution Trends in UK Insurance
Finance

Published on February 18, 2014

Author: Finaccord

Source: slideshare.net

Description

The Channel Metrics series is the most detailed and up-to-date guide to insurance distribution trends in the UK that is available on a published basis.

It covers ten separate insurance product and service categories, endowing it with a unique level of detail and information about a number of policy types that are otherwise ignored or under-researched.

It includes:
Accident and health insurance
Annual travel insurance
Breakdown recovery insurance
Financial advice
Home emergency insurance
Household insurance
Life insurance
Motor insurance
Pet insurance
Single-trip travel insurance

It analyses:
• how consumers acquire or take out these products and services - e.g. online, telephone, post or in person;
• from whom they acquire them or take them out - e.g. direct from the provider, through brokers or affinity schemes;
• how often they acquire them or take them out - i.e. how many consumers acquired a product in the last year, either for the first time or by switching provider instead of renewing or carrying on with an existing product.

Findings from this survey, which depicts trends in 2013, are compared for most products with those from 2007, 2009 and 2011 to show trends over time.

Each of the ten insurance product categories is covered by its own briefing accompanied by an Excel MetricsBASE™ dataset.

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance Channels Metrics: Consumer Distribution Trends in UK Insurance Series Prospectus February 2014 Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 1

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance Prospectus contents Page What is the research? Which insurance products and services are covered? What is the difference between distribution interfaces and distribution channels? Which specific distribution channels are covered for each insurance product or service? What is the rationale? How are the briefings structured? What are the key features of the research? How can the research be used? Who can use the research? What are some of the key findings? What methodology has been used? How does the consumer sample break down? What is the cost and format? How can the research be purchased? 3 4 5 6 7 8 9 10 11 12-15 16 17 18 19 Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 2

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What is the research? The Channel Metrics series is the most detailed and up-to-date guide to insurance distribution trends in the UK that is available on a published basis. It covers ten separate insurance product and service categories, endowing it with a unique level of detail and information about a number of policy types that are otherwise ignored or under-researched. It analyses: • how consumers acquire or take out these products and services - e.g. online, telephone, post or in person; • from whom they acquire them or take them out - e.g. direct from the provider, through brokers or affinity schemes; • how often they acquire them or take them out - i.e. how many consumers acquired a product in the last year, either for the first time or by switching provider instead of renewing or carrying on with an existing product. Findings from this survey, which depicts trends in 2013, are compared for most products with those from 2007, 2009 and 2011 to show trends over time. Each of the ten insurance product categories is covered by its own briefing accompanied by an Excel MetricsBASE™ dataset. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 3

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance Which insurance products and services are covered? Accident and health insurance * Annual travel insurance Breakdown recovery insurance Financial advice Home emergency insurance Household insurance Life insurance Motor insurance Pet insurance Single-trip travel insurance Note – the briefing for accident and health insurance incorporates results for four insurance policy types: dental insurance, health / hospital cash plans, personal accident insurance and private medical insurance. These are presented both in an aggregated format and also separately for each policy type in the appendix. Note – Finaccord also produces separate research about distribution interfaces and channels used in the UK for card protection insurance (see Card Protection Metrics), extended warranties for white, brown and grey goods (see Warranty Metrics) and mobile gadget and phone insurance (see Mobile Metrics). Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 4

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What is the difference between distribution interfaces and distribution channels? Channel Metrics analyses how consumers acquire insurance products and services by distribution interface and distribution channel. Customers buy through an interface and from a channel, and each channel can use a number of interfaces (e.g. a bank or building society can sell insurance face-to-face, online, by inbound or outbound phone or by post). DISTRIBUTION INTERFACES DISTRIBUTION CHANNELS Direct sales (bought directly from the product provider) Face-to-face Financial advisers, brokers and online aggregators Online (via laptop / desktop, tablet or mobile phone) Not-for-profit affinity groups (e.g. charities, trade unions) Inbound telephone (consumer calls provider) Commercial partners (e.g. media firms, Post Office, supermarkets) Outbound telephone (provider calls consumer) Financial partners (i.e. financial firms if not the ultimate providers) Post Worksite (i.e. through employers) Sector-specific distribution channels (e.g. travel firms, vets) Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 5

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance Which specific distribution channels are covered for each insurance product or service? Insurance product or service Direct sales Insurance aggregators, brokers and financial advisers Not-for profit affinity groups Aggregators Insurance brokers / advisers Charities Educational institutions Yes Yes Yes Yes Yes Yes Dental insurance Yes Yes Yes Yes Yes Health / hospital cash plans Yes Yes Yes Yes Yes Personal accident insurance Yes Yes Yes Yes Private medical insurance Yes Yes Yes Annual travel insurance Yes Yes Breakdown recovery insurance Yes Yes Financial advice Yes Home emergency insurance Yes Yes Household insurance Yes Life insurance Non-financial commercial partners Automotive associations (when not direct) Trade unions Banks or building societies Credit card issuers Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Motor insurance Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Pet insurance Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Single-trip travel insurance Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Accident and health insurance Professional or Sports trade organisations associations Financial partners Worksite Cashback websites Catalogue or other retailers Electricity, gas or water companies Football or other sports clubs Loyalty schemes Magazines, newspapers or other media Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Post Office Supermarkets within which Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Note – other specific distribution channels included for a limited number of insurance products or services are: airlines for annual and single-trip travel insurance; automotive clubs for breakdown recovery and motor insurance; car dealers for breakdown recovery and motor insurance; car manufacturers for breakdown recovery and motor insurance; dentists for dental insurance; estate agents for household insurance; insurance companies (where not direct) for breakdown recovery insurance, financial advice and home emergency insurance; pet owners' clubs for pet insurance; stockbrokers for financial advice; travel agents and tour operators for annual and single-trip travel insurance; and vets for pet insurance. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 6

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What is the rationale? While the characteristics of the insurance products themselves evolve over time at a fairly gradual rate, changes in distribution dynamics are more rapid and subject to regular competitive and technological disruptions. Thus, understanding these changes is key to successful marketing of insurance. Indeed, consumers can acquire insurance products and services in a great many ways, but standard industry data often misses the complexity of these from the consumer’s point of view meaning that it is of limited practical value. In contrast, the Channel Metrics series makes the essential distinction between distribution interfaces and distribution channels. Moreover, leveraging Finaccord's knowledge of affinity and partnership marketing, Channel Metrics also provides data across all significant distribution channels (e.g. over 20 in the case of motor insurance including car dealers, car manufacturers, cashback websites, the Post Office, professional associations, supermarkets and trade unions, as well as banks and building societies, direct sales, insurance brokers and online aggregators). As such, it helps to answer a variety of key questions. For example, how do the retention rates of cashback websites and online aggregators compare to those of other distribution channels? Can online aggregators carry on growing across all insurance product categories or have they now peaked in some areas? Which affinity and corporate partner distribution channels are making progress and which are falling back? Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 7

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance How are the briefings structured? 0. Executive Summary: providing a concise evaluation of the principal findings for the insurance product or service covered in each briefing. 1. Introduction: offering rationale and a detailed description of the methodology. 2. Survey findings: presentation of the survey results broken down into: switching rates, brand new sales and renewals; distribution interfaces; generic distribution channels (e.g. commercial partners); and specific distribution channels (e.g. supermarkets). Data is presented for 2013, 2011, 2009 and 2007 to show how distribution trends are changing over time. For the online distribution interface, note that the results for 2013 are also segmented by type of device used, differentiating between laptop / desktop computers, tablets and mobile phones. 3. Appendix: providing a sample breakdown by age group, household income band and geographical location plus a transcript of the online survey script used. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 8

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What are the key features of the research? Key features of these briefings include: • separate data given across ten key insurance product and service categories; • presentation of figures not only depicting distribution trends in 2013 but also comparing them to those recorded by previous surveys carried out in 2007, 2009 and 2011; • differentiated results provided for all consumers with the insurance product or service in question (i.e. the 'stock' of insured respondents), for those switching provider or buying for the first time in 2013 (i.e. the available market in that year given that they made a choice about which distribution interface and channel to use) and for those who simply renewed their policy in 2013 (i.e. showing the distribution choices that they made in the year that they originally acquired the insurance product or service); • coverage of all significant distribution channels for each insurance product or service category including those that are specific to particular policy types (e.g. airlines in the case of annual and single-trip travel insurance, car dealers and manufacturers for motor insurance, estate agents for household insurance, pet owner clubs and vets for pet insurance). Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 9

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance How can the research be used? You may be able to use these briefings and the MetricsBASE™ datasets that accompany them in one or more of the following ways: • understand trends in usage of distribution interfaces and channels for the specific insurance product categories that are relevant to you; • use the time series data to appreciate which distribution interfaces and channels are gaining in importance, which are stable and which are in decline; • appreciate how annual retention rates vary radically across the various distribution interfaces and channels researched – the most rapidly growing distribution systems are not necessary the most attractive to insurance providers because they are often characterised by high churn rates; • gain insight into the apparent distribution share of under-researched affinity and corporate partner channels for which product-specific data is not otherwise available in the public domain. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 10

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance Who can use the research? 1. Insurance companies: understand trends across the five distribution interfaces, to see which products are becoming ‘online only’ and which can be distributed by other means; 2. Banks, building societies and credit card issuers: assess what volume of sales you should make as an intermediary, to see which products you should seek to promote and through which interface; 3. Affinity and commercial partners: for organisations ranging from automotive associations to trade unions and from catalogue retailers to supermarkets, this research will show you which types of insurance consumers are most - and least - likely to buy from you; 4. Management consultancies: are you helping an insurance company or an affinity / commercial partner with its distribution strategy? Understand channel metrics across a broad range of insurance products and services, saving time and effort on researching the subject yourself. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 11

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What are some of the key findings? 1. Among new buyers and switchers for insurance product X, online distribution became even more dominant in 2013 while face-to-face sales disappeared altogether % split of distribution interfaces among new buyers and switchers 100% 80% Post Outbound phone 60% Inbound phone 40% Online Face-to-face 20% 0% 2007 2009 2011 2013 Note – insurance product X is disclosed in the relevant briefing Source: Finaccord Channel Metrics surveys, 2007, 2009, 2011 and 2013 Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 12

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What are some of the key findings? (cont.) 2. Among all respondents with insurance product Y, usage of insurance aggregators and brokers declined slightly in 2013 relative to 2011 % split of distribution interfaces among all respondents 100% 80% Worksite Commercial partners 60% Financial partners 40% Not-for-profit affinity groups Insurance aggregators and brokers 20% Direct sales 0% 2007 2009 2011 2013 Note – insurance product Y is disclosed in the relevant briefing Source: Finaccord Channel Metrics surveys, 2007, 2009, 2011 and 2013 Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 13

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What are some of the key findings? (cont.) 3. For insurance product Z, banks and building societies enjoy vastly higher renewal rates than other important channels, especially aggregators % of respondents renewing a policy taken out prior to 2013 50% x Banks or building societies 40% HIGHER SHARE OF RENEWALS 30% x All other channels x Direct sales 20% HIGHER SHARE 10% 0% Insurance OF SALES brokers x Aggregators x x Cashback websites x Post Office 0% 10% 20% 30% 40% 50% % of switchers and new buyers in 2013 Note – insurance product Z is disclosed in the relevant briefing Source: Finaccord Channel Metrics surveys, 2007, 2009, 2011 and 2013 Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 14

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What are some of the key findings? (cont.) Key findings from the Channel Metrics series in its entirety include: • across all of the relevant insurance products and services (i.e. all apart from financial advice) the distribution share of insurance aggregators among new buyers and switchers increased in just one case in 2013 relative to 2011 and declined in eight cases; • within the same audience, and again only for insurance products and services where they are active, the distribution share of cashback websites in 2013 ranged from a minimum of 5.9% to a maximum of 12.1%; • across all insurance products and services, the distribution share of not-for-profit affinity groups among new buyers and switchers averaged 10.6% in 2013, up from 7.8% in 2011; • the results for 2013 across the relevant insurance products indicate that less than half of all consumers holding a policy taken out through an insurance aggregator had renewed an existing policy; in comparison, policies held directly with insurers were 1.6 times more likely to be renewals with equivalent multiples for not-for-profit affinity groups and non-financial commercial partners of 1.5 and 1.3, respectively. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 15

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What methodology has been used? The Channel Metrics series is based on the results of an online survey of over 1,000 consumers carried out during December 2013. 48.3% of respondents were male and 51.7% female. These respondents provided answers for each of the insurance products reviewed, and the breakdown of the total sample by age group, annual household income band and geographical region is as shown on the following page. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 16

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance How does the consumer sample break down? 65 or over, 17.9% 16-24, 14.5% 25-34, 14.3% Over £80,000, 4.6% Less than £60,000 £10,000, 8.1% £79,999, 5.9% £50,000 £59,999, 7.4% £40,000 £49,999, 8.8% £10,000 £14,999, 12.7% INCOME BANDS £15,000 £19,999, 11.4% 55-64, 15.8% AGE GROUPS 35-44, 18.6% 45-54, 18.8% £30,000 Northern Ireland, £39,999, 15.8% North-East, 3.1% 3.0% South-East (ex. Wales, 5.3% Gtr London), £25,000 East Midlands, 14.9% £29,999, 12.6% 7.4% Greater London, 11.4% Scotland, 8.2% GEOGRAPHIES South-West, 8.4% £20,000 £24,999, 12.8% North-West, 11.5% East Anglia, Yorkshire / 9.2% Humberside, West Midlands, 8.4% 9.2% Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 17

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance What is the cost and format? The Channel Metrics briefings are available as standard PDF documents and associated MetricsBASE™ datasets in Excel format. The cost structure for this research series is as follows: 1 briefing = GBP 495, 2 briefings = GBP 945, 3 briefings = GBP 1,345, 4 briefings = GBP 1,695, 5 briefings = GBP 1,995, 6 briefings = GBP 2,245, 7 briefings = GBP 2,345, 8 briefings = GBP 2,395, 9 briefings = GBP 2,445, all 10 briefings = GBP 2,495. For UK-based clients, VAT at the prevailing rate will be added to the basic price. Costs quoted are for a single site user licence only. For a corporate user licence, please see the final slide for further details. Invoices can be paid in EUR or USD, at the prevailing exchange rate, if preferred. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 18

Finaccord Channel Metrics: Consumer Distribution Trends in UK Insurance How can the research be purchased? Simple. Just go to the relevant area of the Finaccord web site available at www.finaccord.com/order_uk_channel-metrics.htm and fill in the online order form, clearly indicating: • report required • type of corporate user licence, if required * • billing name • address and e-mail address • purchase order number, if applicable Please allow up to one working day for the delivery of electronic copy by e-mail. * For the corporate user licence please choose one of the following options: 1. One office, one country: no supplement over and above basic cost of reports ordered 2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered 3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered 4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers. Expertise in financial services © Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 19

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