Abstract
Finaccord' s report titled Risk Metrics: Consumer Concern for and Acquisition of Insurance for Everyday Risks in the UK is a study about 40 sets of risk and associated insurance, warranty and assistance products that are often described as ' niche' when compared to more mainstream insurance policies in spite of the fact that the majority are considered relevant by over 50% of consumers. Notably, the research measures the relevance and degree of concern caused to survey participants by each of these 40 risks as well as measuring the take-up rates for the related insurance policies, whether on a stand-alone or packaged basis, among consumers with results broken out in detail in each case by gender, age group, annual household income and geographical location of respondents.
The types of insurance used to cover these risks are listed overleaf and fall into seven broader categories, namely: personal health; financial commitments; personal possessions (eg. accidental damage, loss, theft); personal possessions (eg. mechanical and other defects); personal security, home ownership; and car ownership.
Table of Contents
0.0 EXECUTIVE SUMMARY
- In aggregate, the market for stand-alone policies in these 40 areas is worth almost £17 billion
- In a majority of cases, more than 50% of respondents perceive the underlying risks to be relevant
- The risks covered by identity theft insurance / assistance arouse the greatest consumer concern
- Protection of credit card payments generates comparatively little concern among cardholders
- Loss of driving license insurance is the least commonly held form of insurance of the 40 analysed
- Many types of cover are under-sold relative to the concern that the underlying risks produce
- Packaged or substitute cover outweighs stand-alone insurance for 25 of the 40 risks reviewed
- Providers of credit cards and premium accs. can exert more influence than is presently the case
- The results for particular consumer segments yield some results that are predictable
- … and others, such as the purchase patterns for extended warranties, that are more surprising
1.0 INTRODUCTION
- Research rationale
- In total, policies designed to cover the 40 groups of risk add up to £17 billion stand-alone market
- … 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
- Research sample
- Finaccord
- Risk Metrics and other consumer-focused studies
- UK affinity and partnership marketing publications
- IPT / Tpoll
2.0 RISK OVERVIEW
- Introduction
- Relevance of underlying risks
- Insurance types
- Consumers are most likely to perceive critical illness and identity theft as relevant risks
- … with only nine out of 40 risks perceived as relevant by fewer than 50% of respondents
- Insurance groups
- On average, 77.0% of consumers perceive risks related to personal health to be relevant
- Degree of concern caused by underlying risks
- Insurance types
- Among the relevant audience, the risk of identity theft produces the highest rates of concern
- … with parents and pet owners also relatively worried about the health of their children and pets
- Generally speaking, consumers are unconcerned about defects or accidental dam. to furniture
- Insurance groups
- The types of risk insured by extended warranties are least likely to produce concern
- The risks covered by insurance for golfing equipment are least likely to be relevant to consumers
- Insurance take-up rates
- Overall
- 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
- Loss of driving license insurance achieves the weakest overall take-up rate among consumers
- Among consumers for whom underlying risk is relevant
- RISK METRICS: CONSUMER CONCERN FOR AND ACQUISITION OF INSURANCE FOR EVERYDAY RISKS IN THE UK
- 17 of the 40 types of cover considered are held by more than a third of the relevant audience
- Several types of insurance appear under-sold relative to the concern that the related risks cause
- Over 50% of the concerned audience hold the applicable insurance for just 10 of the 40 risks
- … and the lack of cover is particularly acute at over 80% of concerned consumers in six cases
- Stand-alone and packaged / substitute cover
- Insurance to cover the risks analysed can often by acquired on a packaged basis
- … although there is a stand-alone market, albeit sometimes small, in almost every instance
- Approximate market size for stand-alone cover
- The survey results provide a basis for the calculation of an approximate market size
- … albeit a number of adjustments have been made in recognition of the research methodology
- … with a ' sanity check' having been made, where viable, against publicly available data sources
- The aggregate market for stand-alone cover possesses an aggregate value of almost £17 billion
3.0 RISK ANALYSIS
- Introduction
- Risks related to personal health
- Children' s health
- Critical illness
- Dental expenses
- Medical or hospital treatment
- Permanent disability
- Personal accident
- Sports accident
- Risks related to financial commitments
- Mortgage payments
- Loan / car finance payments
- Credit card payments
- Bill payments
- Legal expenses
- Price protection
- Risks related to personal possessions (eg. accidental damage, loss and theft)
- Angling equipment
- Bicycles
- Golfing equipment
- Jewellery
- Laptop computers
- Mobile gadgets (eg. Blackberry, iPod, MP3 player, personal digital assistant)
- Mobile telephones
- Musical instruments
- Pets
- Photographic equipment
- Purchase protection
- Satellite navigation systems (satnavs)
- Risks related to personal possessions (mechanical or other defects)
- Audio-visual appliances
- Desktop / laptop computers
- Kitchen appliances
- Furniture
- Risks related to personal security
- Card, key and document protection
- Identity theft
- Risks related to home ownership
- Electricity supply
- RISK METRICS: CONSUMER CONCERN FOR AND ACQUISITION OF INSURANCE FOR EVERYDAY RISKS IN THE UK
- Gas boilers, gas supply pipes and gas central heating
- Drainage, plumbing and water supply pipes
- Pest contamination
- Home crises
- Risks related to car ownership
- Breakdown recovery
- Mechanical defects to cars
- Shortfall protection
- Loss of driving license
4.0 SEGMENT ANALYSIS
- Introduction
- Risks related to personal health
- Children' s health
- Critical illness
- Dental expenses
- Medical or hospital treatment
- Permanent disability
- Personal accident
- Sports accident
- Risks related to financial commitments
- Mortgage payments
- Loan / car finance payments
- Credit card payments
- Bill payments
- Legal expenses
- Price protection
- Risks related to personal possessions (eg. accidental damage, loss or theft)
- Angling equipment
- Bicycles
- Golfing equipment
- Jewellery
- Laptop computers
- Mobile gadgets
- Mobile telephones
- Musical instruments
- Pets
- Photographic equipment
- Purchase protection
- Satellite navigation systems (satnavs)
- Risks related to personal possessions (mechanical or other defects)
- Audio-visual appliances
- Desktop / laptop computers
- Kitchen appliances
- Furniture
- Risks related to personal security
- Card, key and document protection
- Identity theft
- Risks related to home ownership
- Electricity supply
- Gas boilers, gas supply pipes and gas central heating
- Drainage, plumbing and water supply pipes
- Pest contamination
- RISK METRICS: CONSUMER CONCERN FOR AND ACQUISITION OF INSURANCE FOR EVERYDAY RISKS IN THE UK
- Home crises
- Risks related to car ownership
- Breakdown recovery
- Mechanical defects to cars
- Shortfall protection
- Loss of driving license
GRAPHICS / TABLES
- Sample breakdown by age group, household income band and geographical location
- Ranking of insurance types by degree of relevance to consumers, 2007
- Ranking of insurance groups by degree of relevance to consumers, 2007
- Ranking of ins. types by degree of concern caused by und. risks among cons. for whom risk is relevant, 2007
- Ranking of ins. groups by degree of concern caused by und. risks among cons. for whom risk is relevant, 2007
- Plot of relevance of and concern caused by underlying risks among consumers, 2007
- Ranking of insurance types by overall take-up rates among all consumers, 2007
- Ranking of ins. types by overall take-up rates among cons. for whom the underlying risks are relevant, 2007
- Conc. caused by und. risks and overall ins. take-up rates among cons. for whom the und. risks are relev., 2007
- Rank. of ins. types by overall take-up rates among cons. who are very or quite concerned by und. risks, 2007
- All cons. who are very or quite concerned by the und. risks and those lacking ins. within the same group, 2007
- Rank. of ins. types by overall take-up rates among all cons. split between stand-alone / packaged cover, 2007
- Rank. of ins. types by ov. take-up rates am. cons. for whom und. risks are relev. split bet. s-a. / pack. cover, 2007
- Cons. for whom the und. risks are relev. with s-a. cover and those within same group with pack. cover, 2007
- Approximate value of the market for stand-alone policies in the 40 relevant categories of policy, 2006/7
- Children' s health: level of concern and degree of relevance to consumers, 2007
- Children' s health insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Critical illness: level of concern and degree of relevance to consumers, 2007
- Critical illness insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Dental expenses: level of concern and degree of relevance to consumers, 2007
- Dental expenses insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Medical or hospital treatment: level of concern and degree of relevance to consumers, 2007
- Health / hospital cash plans: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Permanent disability: level of concern and degree of relevance to consumers, 2007
- Permanent health insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Personal accident: level of concern and degree of relevance to consumers, 2007
- Personal accident insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Sports accident: level of concern and degree of relevance to consumers, 2007
- Sports accident insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Mortgage payments: level of concern and degree of relevance to consumers, 2007
- Mort. payment protection ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Loan / car finance payments: level of concern and degree of relevance to consumers, 2007
- Loan payment protection ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Credit card payments: level of concern and degree of relevance to consumers, 2007
- Credit card pay. protect. ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Bill payments: level of concern and degree of relevance to consumers, 2007
- Bill payment protection ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Legal expenses: level of concern and degree of relevance to consumers, 2007
- Legal expenses insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Price protection: level of concern and degree of relevance to consumers, 2007
- Price protection insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of angling equipment: level of concern and degree of relevance to consumers, 2007
- Angling equipment insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007100
- Acc. dam. to or loss / theft of bicycles: level of concern and degree of relevance to consumers, 2007
- Bicycle insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of golfing equipment: level of concern and degree of relevance to consumers, 2007
- Golfing equipment insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of jewellery: level of concern and degree of relevance to consumers, 2007
- Jewellery insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of laptop computers: level of concern and degree of relevance to consumers, 2007
- Laptop computer insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of mobile gadgets: level of concern and degree of relevance to consumers, 2007
- Mobile gadget insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of mobile telephones: level of concern and degree of relevance to consumers, 2007
- Mobile telephone insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of music. instruments: level of concern and degree of relevance to consumers, 2007
- Musical instrument ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Veterinary exps. assoc. with ownership of pets: level of concern and degree of relevance to consumers, 2007
- Pet insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Pet insurance: consumer penetration rates split between owners of cats, dogs and other animals, 2007
- Acc. dam. to or loss / theft of photo. equipment: level of concern and degree of relevance to consumers, 2007
- Photograph. equipment ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of any kind of high value prod.: level of concern and degree of relev. to cons., 2007
- Purchase protection ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Acc. dam. to or loss / theft of satnavs: level of concern and degree of relevance to consumers, 2007
- Satnav insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Mechanical defects to audio-visual appliances: level of concern and degree of relevance to consumers, 2007
- Ext. warranties for audio-visual apps.: cons. pen. rates split by stand-alone purchase / packaged cover, 2007
- Mechanical defects to desktop / laptop computers: level of concern and degree of relevance to cons., 2007
- Ext. warranties for desktop / laptop comps.: cons. pen. rates split by stand-alone purch. / packaged cover, 2007
- Mechanical defects to kitchen appliances: level of concern and degree of relevance to consumers, 2007
- Ext. warranties for kitchen apps.: cons. pen. rates split by stand-alone purchase / packaged cover, 2007
- Defects, including acc. damage, to furniture: level of concern and degree of relevance to consumers, 2007
- Ext. warranties for furniture: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Loss or theft of cards, keys or valuable documents: level of concern and degree of relevance to cons., 2007
- Card protection insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Identity theft: level of concern and degree of relevance to consumers, 2007
- Identity theft insurance / assist.: cons. penetration rates split by stand-alone purchase / packaged cover, 2007
- Electrical emergencies or faults: level of concern and degree of relevance to consumers, 2007
- Elec. emergency and breakdown ins.: cons. pen. rates split by stand-alone purchase / packaged cover, 2007
- Gas boiler, gas supply pipe etc. emergencies or faults: level of concern and degree of relevance to cons., 2007
- Gas boiler, gas supply pipe etc. ins.: cons. pen. rates split by stand-alone purchase / packaged cover, 2007
- Drainage, plumbing and water supply emergs. or faults: level of concern and degree of relev. to cons., 2007
- Drain., plumbing and water supply ins.: cons. pen. rates split by stand-alone purchase / packaged cover, 2007
- Pest contamination: level of concern and degree of relevance to consumers, 2007
- Pest contamination ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Earthquakes, floods, storms and other natural calamities: level of concern and degree of relev. to cons., 2007
- Home crisis insurance: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Breakdown recovery: level of concern and degree of relevance to consumers, 2007
- Breakdown recovery insurance: cons. penetration rates split by stand-alone purchase / packaged cover, 2007
- Mechanical defects to cars: level of concern and degree of relevance to consumers, 2007
- Extended warranties for cars: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Shortfall protection: level of concern and degree of relevance to consumers, 2007
- GAP / shortfall protection ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Loss of driving license: level of concern and degree of relevance to consumers, 2007
- Loss of driving license ins.: cons. penetration rates split by stand-alone purchase and packaged cover, 2007
- Children' s health: level of concern and degree of relevance split by consumer segment, 2007
- Children' s health insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Critical illness: level of concern and degree of relevance split by consumer segment, 2007
- Critical illness insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Dental expenses: level of concern and degree of relevance split by consumer segment, 2007
- Dental expenses insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Medical or hospital treatment: level of concern and degree of relevance split by consumer segment, 2007
- Health / hospital cash plans: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Permanent disability: level of concern and degree of relevance split by consumer segment, 2007
- Permanent health insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Personal accident: level of concern and degree of relevance split by consumer segment, 2007
- Personal accident insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Sports accident: level of concern and degree of relevance split by consumer segment, 2007
- Sports accident insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Mortgage payments: level of concern and degree of relevance split by consumer segment, 2007
- Mort. payment protection ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Loan / car finance payments: level of concern and degree of relevance split by consumer segment, 2007
- Loan payment protection ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Credit card payments: level of concern and degree of relevance split by consumer segment, 2007
- Credit card pay. protect. ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Bill payments: level of concern and degree of relevance split by consumer segment, 2007
- Bill payment protection ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Legal expenses: level of concern and degree of relevance split by consumer segment, 2007
- Legal expenses insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Price protection: level of concern and degree of relevance split by consumer segment, 2007
- Price protection insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of angling equipment: level of concern and degree of relev. split by cons. seg., 2007
- Angling equipment insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of bicycles: level of concern and degree of relev. split by cons. seg., 2007
- Bicycle insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of golfing equipment: level of concern and degree of relev. split by cons. seg., 2007
- Golfing equipment insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of jewellery: level of concern and degree of relevance split by cons. seg., 2007
- Jewellery insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of laptop computers: level of concern and degree of relev. split by cons. seg., 2007
- Laptop computer insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of mobile gadgets: level of concern and degree of relev. split by cons. seg., 2007
- Mobile gadget insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of mobile telephones: level of concern and degree of relev. split by cons. seg., 2007
- Mobile telephone insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of music. instruments: level of concern and degree of relev. split by cons. seg., 2007
- Musical instrument ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Veterinary exps. assoc. with ownership of pets: level of concern and degree of relev. split by cons. seg., 2007
- Pet insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of photo. equipment: level of concern and degree of relev. split by cons. seg., 2007
- Photograph. equipment ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of any kind of high value prod.: concern / degree of relev. split by cons. seg., 2007
- Purchase protection ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Acc. dam. to or loss / theft of satnavs: level of concern and degree of relev. split by cons. seg., 2007
- Satnav insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Mechanical defects to audio-visual appliances: level of concern and degree of relev. split by cons. seg., 2007
- Ext. warranties for audio-visual apps.: cons. pen. rates split by s-a. / packaged cover and by cons. seg., 2007
- Mechanical defects to desktop / laptop computers: concern and degree of relev. split by cons. seg., 2007
- Ext. warranties for desktop / laptop comps.: cons. pen. rates split by s-a. / pack. cover and by cons. seg., 2007
- Mechanical defects to kitchen appliances: level of concern and degree of relev. split by cons. seg., 2007
- Ext. warranties for kitchen apps.: cons. pen. rates split by s-a. / packaged cover and by cons. seg., 2007
- Defects, including acc. damage, to furniture: level of concern and degree of relev. split by cons. seg., 2007
- Ext. warranties for furniture: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Loss or theft of cards, keys or valuable documents: concern and degree of relev. split by cons. seg., 2007
- Card protection insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Identity theft: level of concern and degree of relevance split by consumer segment, 2007
- Identity theft insurance / assist.: cons. pen. rates split by s-a. / packaged cover and by cons. seg., 2007
- Electrical emergencies or faults: level of concern and degree of relevance split by consumer segment, 2007
- Elec. emergency and breakdown ins.: cons. pen. rates split by s-a. / packaged cover and by cons. seg., 2007
- Gas boiler, gas supply pipe etc. emergencies or faults: concern and degree of relev. split by cons. seg., 2007
- Gas boiler, gas supply pipe etc. ins.: cons. pen. rates split by s-a. / packaged cover and by cons. seg., 2007
- Drainage, plumbing and water supply emergs. or faults: concern and degree of relev. split by cons. seg., 2007
- Drain., plumbing and water supply ins.: cons. pen. rates split by s-a. / packaged cover and by cons. seg., 2007
- Pest contamination: level of concern and degree of relevance split by consumer segment, 2007
- Pest contamination ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Earthquakes, floods, storms and other natural calamities: concern / degree of relev. split by cons. seg., 2007
- Home crisis insurance: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Breakdown recovery: level of concern and degree of relevance split by consumer segment, 2007
- Breakdown recovery insurance: cons. penetration rates split by s-a. / packaged cover and by cons. seg., 2007
- Mechanical defects to cars: level of concern and degree of relevance split by consumer segment, 2007
- Extended warranties for cars: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Shortfall protection: level of concern and degree of relevance split by consumer segment, 2007
- GAP / shortfall protection ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
- Loss of driving license: level of concern and degree of relevance split by consumer segment, 2007
- Loss of driving license ins.: cons. pen. split by stand-alone / packaged cover and by cons. seg., 2007
