Introduction
The report examines key distribution trends taking place in the motorcycle insurance market and offers insight into the advertising strategies of the top motorcycle insurance distributors. It also analyses which underwriters are leading the way in this market and forecasts what the future holds for the sector over the next four years.
Scope
Analysis of market size and the drivers behind recent developments. Insight into the main competitive developments taking place in the UK motorcycle insurance market. GWP forecasts to 2014, based on Datamonitor's in-house expertise and proprietary model.
Highlights
In 2008, total advertising spend on motorcycle insurance fell by a significant 60.0% to £323,985 from £810,683 in 2007. It is likely that the recession was a significant driver behind many firms' decisions to reduce their spending on marketing that year in a bid to decrease expenses.
Industry executives stated that the popularity of aggregators had peaked in 2009, with the recession driving many consumers onto price comparison sites in a bid to generate cost savings. One industry executive interviewed by Datamonitor claimed that as much as 40% of new business sales were being delivered through aggregators in 2009.
Under Datamonitor's base case scenario it is assumed that the tough market conditions in 2009 led to a decline of 3.2% in policies-in-force due to a reduction in penetration rates. However, 2010 will see a return to growth in policy numbers as recreational motorcyclists return to the market.
Reasons to Purchase
Benchmark your performance against that of your competitors. Plan your future motorcycle insurance strategy using Datamonitor's market size forecasts. Keep abreast with the latest competitor developments taking place in the market.
The report examines key distribution trends taking place in the motorcycle insurance market and offers insight into the advertising strategies of the top motorcycle insurance distributors. It also analyses which underwriters are leading the way in this market and forecasts what the future holds for the sector over the next four years.
Scope
Highlights
In 2008, total advertising spend on motorcycle insurance fell by a significant 60.0% to £323,985 from £810,683 in 2007. It is likely that the recession was a significant driver behind many firms' decisions to reduce their spending on marketing that year in a bid to decrease expenses.
Industry executives stated that the popularity of aggregators had peaked in 2009, with the recession driving many consumers onto price comparison sites in a bid to generate cost savings. One industry executive interviewed by Datamonitor claimed that as much as 40% of new business sales were being delivered through aggregators in 2009.
Under Datamonitor's base case scenario it is assumed that the tough market conditions in 2009 led to a decline of 3.2% in policies-in-force due to a reduction in penetration rates. However, 2010 will see a return to growth in policy numbers as recreational motorcyclists return to the market.
Reasons to Purchase
OVERVIEW
Catalyst
Summary
EXECUTIVE SUMMARY
Aggregators are causing a stir in the motorcycle insurance market
The top three aggregators are pushing motorcycle insurance sales on their sites
Aggregators are diminishing traditional motorcycle broker brands
Groupama is growing its share rapidly in a market estimated to be worth £176m in 2009
The market remains attractive though pillion passenger claims represent a risk to profitability
Groupama has been making a big play in the market
The return of the 'recreational biker' is central to the market achieving growth
Table of Contents
Table of figures
Table of tables
MARKET CONTEXT
Introduction
The motorcycle insurance market has attractive profit margins
GWP contracted in 2009 as a result of the recession and strong competitive pressures in the market
Aggregators are bringing dynamic changes to the market
There are good margins to be had in the motorcycle insurance business
The total motorcycle parc has continued to increase, though new registrations have declined significantly
The number of registered motorcycles has been steadily increasing in Great Britain
New motorcycle registrations fell by 9.0% in Great Britain in 2009
Powerbikes continue to dominate the UK motorcycle parc, which is continuing to age
More than half of motorcycles in Great Britain were first registered more than six years ago
The number of motorcycles with engine sizes above 1,000cc have increased significantly in Great Britain
Powerbikes comprise half of the top 10 models of motorcycles sold in the UK
Improvements in road safety are positively impacting claims costs for insurers
Greater awareness of road safety issues has resulted in a decline in the number of motorcycle casualties
The risk of death or serious injury remains considerably higher for motorcyclists than other road users
Claims frequency fell in the UK motorcycle market in 2008
Claims costs relating to theft have been reduced significantly in 2008
COMPETITIVE DYNAMICS
Introduction
Carole Nash has launched a policy covering cars and motorcycles
Carole Nash introduced a new product that covers cars as well as motorcycles, and took over the Harley Davidson Insurance Scheme
Saga launched a motorcycle insurance product for the over-50s
Brokers continue to dominate the distribution of motorcycle insurance, although aggregators are emerging as a powerful force
Carole Nash, Bennetts and Devitt are the largest distributors of motorcycle insurance in the UK
Most aggregators offer comparison services for motorcycle insurance
Groupama has made a big play in the market in recent years
Five of the top 10 witnessed their premium income contract in the motorcycle insurance market
Market leader Equity Red Star continued to witness a contraction in its motorcycle GWP
AXA's premium income declined by 11.7% to £13.6m
HSBC and QBE witnessed substantial falls in their premium income
RSA experienced a 1.3% fall in its premium income
Three of the top 10 witnessed growth in their motorcycle books of business in 2008
Aviva and Groupama experienced double-digit growth in 2008
RBS experienced modest growth in its motorcycle business during 2008
Advertising spending on motorcycle insurance has fallen considerably since 2006
Competitors spent less of their advertising budgets on direct mail in 2008
Bennetts significantly reduced its marketing spend on motorcycle insurance in H1 2009
Devitt was the only motorcycle insurance advertiser to spend a proportion of its budget on direct mail advertising
FUTURE DECODED
Introduction
Base case: moderate increases in price will lead to the market reaching £204.2m in GWP by 2014
Underlying increases in the motorcycle parc and increases to price will result in moderate growth in GWP
GWP is forecast to grow at a CAGR of 2.9% between 2010 and 2014
Best case: strong price increases will drive GWP growth in the market
Underwriters will achieve strong rate rises as competitive pressures ease in the market
Strong rate increases will drive GWP upwards to £251.7m by 2014
Worst case: GWP growth remains subdued after experiencing a significant fall in 2009
Policies-in-force are expected to increase by an average annual rate of 3% between 2010 and 2014
Motorcycle GWP is forecast to recover slowly under the worst case scenario
APPENDIX
Definitions
Premium income measures
Earned premiums
Gross Premium
Net Premium
Written premiums
Other definitions
Channel
Direct insurer/writer
Brokers
Bancassurers
Brandassurers
Platform
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
LIST OF TABLES
Table 1: UK motorcycle GWP, 2005-09 (£000)
Table 2: Motorcycle and total vehicle parc in Great Britain, 2002-09 (000s)
Table 3: Total number of new motorcycle registrations in Great Britain, 2002-09 (000s)
Table 4: Motorcycle parc by age of first registration, 1999-2008 (000s)
Table 5: Motorcycle parc in Great Britain by engine size, 1999-2008 (000s)
Table 6: Top 10 motorcycle models in the UK, 2008
Table 7: Road traffic casualties in Great Britain, 2001-08
Table 8: Reported road casualties in Great Britain: relative risk of different forms of transport, 2008 (Rate per billion km)
Table 9: Volume and frequency of motorcycle claims in the UK, 2004-08
Table 10: Motorcycle theft claims statistics, 2004-08
Table 11: Vehicle related theft offences, 1981-2008/09 (000s)
Table 12: The top 10 UK motorcycle insurers by market share, 2005-08
Table 13: The top 10 UK motorcycle insurers by GWP, 2005-08 (£000s)
Table 14: UK motorcycle advertising spend by media, 2006-08 (£)
Table 15: Advertising spend by competitor, 2006 to H1 2009, (£)
Table 16: Motorcycle insurance advertising spend by competitor and media, H1 2009
Table 17: Base case: key variables affecting motorcycle insurance GWP, 2010-14
Table 18: Base case: forecast of UK motorcycle GWP, 2010-14f
Table 19: Best case: key variables affecting motorcycle insurance GWP, 2010-14
Table 20: Best case: forecast of UK motorcycle GWP, 2010-14f (£000)
Table 21: Worst case: key variables affecting motorcycle insurance GWP, 2010-14
Table 22: Worst case: forecast of UK motorcycle GWP, 2010-14f (£000)
LIST OF FIGURES
Figure 1: GWP contracted in the market in 2009 as a result of strong competitive pressures and fewer motorcycle sales
Figure 2: There are clear margin benefits from playing in the niche motorcycle market
Figure 3: The number of registered motorcycles in Great Britain reached 1.4 million in 2009
Figure 4: New registrations of motorcycles fell significantly in Great Britain in 2009
Figure 5: Most motorcycles in the British motorcycle parc were first registered between six and 13 years ago
Figure 6: Powerful motorbikes are increasing as a proportion of the total motorcycle parc in Great Britain
Figure 7: The number of motorcycle casualties have declined significantly since 2001
Figure 8: Motorcyclists are more likely to be involved in serious accidents compared to other types of road users
Figure 9: The total number of motorcycle claims notified to insurers fell in 2008
Figure 10: Motorcycle theft claims costs continued to fall in 2008
Figure 11: Saga launched a motorcycle insurance policy for the over-50s
Figure 12: Equity Red Star held a significant share in the UK motorcycle insurance market
Figure 13: Competitors have been spending significantly less on advertising motorcycle insurance in 2008
Figure 14: MCE became the largest advertising spender on motorcycle insurance in 2009
Figure 15: Press advertising was the dominant form of advertising among the top 10 motorcycle advertisers in H1 2009
Figure 16: Policies in force will grow by an annual average rate of 2% between 2010 and 2014
Figure 17: Datamonitor's base case scenario forecasts GWP to reach £204.2m by 2014
Figure 18: Strong price increases are expected to occur in the UK motorcycle insurance market under Datamonitor's best case scenario
Figure 19: GWP is forecast to reach £251.7m under Datamonitor's best case scenario
Figure 20: Premium rates are forecast to increase marginally under Datamonitor's worst case scenario
Figure 21: Slow growth of GWP is forecast under Datamonitor's worst case scenario
Catalyst
Summary
EXECUTIVE SUMMARY
Aggregators are causing a stir in the motorcycle insurance market
The top three aggregators are pushing motorcycle insurance sales on their sites
Aggregators are diminishing traditional motorcycle broker brands
Groupama is growing its share rapidly in a market estimated to be worth £176m in 2009
The market remains attractive though pillion passenger claims represent a risk to profitability
Groupama has been making a big play in the market
The return of the 'recreational biker' is central to the market achieving growth
Table of Contents
Table of figures
Table of tables
MARKET CONTEXT
Introduction
The motorcycle insurance market has attractive profit margins
GWP contracted in 2009 as a result of the recession and strong competitive pressures in the market
Aggregators are bringing dynamic changes to the market
There are good margins to be had in the motorcycle insurance business
The total motorcycle parc has continued to increase, though new registrations have declined significantly
The number of registered motorcycles has been steadily increasing in Great Britain
New motorcycle registrations fell by 9.0% in Great Britain in 2009
Powerbikes continue to dominate the UK motorcycle parc, which is continuing to age
More than half of motorcycles in Great Britain were first registered more than six years ago
The number of motorcycles with engine sizes above 1,000cc have increased significantly in Great Britain
Powerbikes comprise half of the top 10 models of motorcycles sold in the UK
Improvements in road safety are positively impacting claims costs for insurers
Greater awareness of road safety issues has resulted in a decline in the number of motorcycle casualties
The risk of death or serious injury remains considerably higher for motorcyclists than other road users
Claims frequency fell in the UK motorcycle market in 2008
Claims costs relating to theft have been reduced significantly in 2008
COMPETITIVE DYNAMICS
Introduction
Carole Nash has launched a policy covering cars and motorcycles
Carole Nash introduced a new product that covers cars as well as motorcycles, and took over the Harley Davidson Insurance Scheme
Saga launched a motorcycle insurance product for the over-50s
Brokers continue to dominate the distribution of motorcycle insurance, although aggregators are emerging as a powerful force
Carole Nash, Bennetts and Devitt are the largest distributors of motorcycle insurance in the UK
Most aggregators offer comparison services for motorcycle insurance
Groupama has made a big play in the market in recent years
Five of the top 10 witnessed their premium income contract in the motorcycle insurance market
Market leader Equity Red Star continued to witness a contraction in its motorcycle GWP
AXA's premium income declined by 11.7% to £13.6m
HSBC and QBE witnessed substantial falls in their premium income
RSA experienced a 1.3% fall in its premium income
Three of the top 10 witnessed growth in their motorcycle books of business in 2008
Aviva and Groupama experienced double-digit growth in 2008
RBS experienced modest growth in its motorcycle business during 2008
Advertising spending on motorcycle insurance has fallen considerably since 2006
Competitors spent less of their advertising budgets on direct mail in 2008
Bennetts significantly reduced its marketing spend on motorcycle insurance in H1 2009
Devitt was the only motorcycle insurance advertiser to spend a proportion of its budget on direct mail advertising
FUTURE DECODED
Introduction
Base case: moderate increases in price will lead to the market reaching £204.2m in GWP by 2014
Underlying increases in the motorcycle parc and increases to price will result in moderate growth in GWP
GWP is forecast to grow at a CAGR of 2.9% between 2010 and 2014
Best case: strong price increases will drive GWP growth in the market
Underwriters will achieve strong rate rises as competitive pressures ease in the market
Strong rate increases will drive GWP upwards to £251.7m by 2014
Worst case: GWP growth remains subdued after experiencing a significant fall in 2009
Policies-in-force are expected to increase by an average annual rate of 3% between 2010 and 2014
Motorcycle GWP is forecast to recover slowly under the worst case scenario
APPENDIX
Definitions
Premium income measures
Earned premiums
Gross Premium
Net Premium
Written premiums
Other definitions
Channel
Direct insurer/writer
Brokers
Bancassurers
Brandassurers
Platform
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
LIST OF TABLES
Table 1: UK motorcycle GWP, 2005-09 (£000)
Table 2: Motorcycle and total vehicle parc in Great Britain, 2002-09 (000s)
Table 3: Total number of new motorcycle registrations in Great Britain, 2002-09 (000s)
Table 4: Motorcycle parc by age of first registration, 1999-2008 (000s)
Table 5: Motorcycle parc in Great Britain by engine size, 1999-2008 (000s)
Table 6: Top 10 motorcycle models in the UK, 2008
Table 7: Road traffic casualties in Great Britain, 2001-08
Table 8: Reported road casualties in Great Britain: relative risk of different forms of transport, 2008 (Rate per billion km)
Table 9: Volume and frequency of motorcycle claims in the UK, 2004-08
Table 10: Motorcycle theft claims statistics, 2004-08
Table 11: Vehicle related theft offences, 1981-2008/09 (000s)
Table 12: The top 10 UK motorcycle insurers by market share, 2005-08
Table 13: The top 10 UK motorcycle insurers by GWP, 2005-08 (£000s)
Table 14: UK motorcycle advertising spend by media, 2006-08 (£)
Table 15: Advertising spend by competitor, 2006 to H1 2009, (£)
Table 16: Motorcycle insurance advertising spend by competitor and media, H1 2009
Table 17: Base case: key variables affecting motorcycle insurance GWP, 2010-14
Table 18: Base case: forecast of UK motorcycle GWP, 2010-14f
Table 19: Best case: key variables affecting motorcycle insurance GWP, 2010-14
Table 20: Best case: forecast of UK motorcycle GWP, 2010-14f (£000)
Table 21: Worst case: key variables affecting motorcycle insurance GWP, 2010-14
Table 22: Worst case: forecast of UK motorcycle GWP, 2010-14f (£000)
LIST OF FIGURES
Figure 1: GWP contracted in the market in 2009 as a result of strong competitive pressures and fewer motorcycle sales
Figure 2: There are clear margin benefits from playing in the niche motorcycle market
Figure 3: The number of registered motorcycles in Great Britain reached 1.4 million in 2009
Figure 4: New registrations of motorcycles fell significantly in Great Britain in 2009
Figure 5: Most motorcycles in the British motorcycle parc were first registered between six and 13 years ago
Figure 6: Powerful motorbikes are increasing as a proportion of the total motorcycle parc in Great Britain
Figure 7: The number of motorcycle casualties have declined significantly since 2001
Figure 8: Motorcyclists are more likely to be involved in serious accidents compared to other types of road users
Figure 9: The total number of motorcycle claims notified to insurers fell in 2008
Figure 10: Motorcycle theft claims costs continued to fall in 2008
Figure 11: Saga launched a motorcycle insurance policy for the over-50s
Figure 12: Equity Red Star held a significant share in the UK motorcycle insurance market
Figure 13: Competitors have been spending significantly less on advertising motorcycle insurance in 2008
Figure 14: MCE became the largest advertising spender on motorcycle insurance in 2009
Figure 15: Press advertising was the dominant form of advertising among the top 10 motorcycle advertisers in H1 2009
Figure 16: Policies in force will grow by an annual average rate of 2% between 2010 and 2014
Figure 17: Datamonitor's base case scenario forecasts GWP to reach £204.2m by 2014
Figure 18: Strong price increases are expected to occur in the UK motorcycle insurance market under Datamonitor's best case scenario
Figure 19: GWP is forecast to reach £251.7m under Datamonitor's best case scenario
Figure 20: Premium rates are forecast to increase marginally under Datamonitor's worst case scenario
Figure 21: Slow growth of GWP is forecast under Datamonitor's worst case scenario
