Vitality is the most recent UK insurer to exit the motor insurance coverage market resulting from hovering claims prices after RSA left the market in March 2023. If this development continues, the main gamers will turn out to be stronger and are more likely to face much less pricing stress from challengers. Competitors available in the market will fall in consequence, with unfavorable impacts on shoppers.
GlobalData’s 2022 UK Insurance coverage Client Survey discovered that Vitality had a negligent share of UK motor insurance coverage, after solely coming into the market in 2021. RSA was additionally not a serious participant within the UK motor insurance coverage house with shares of 0.5% in 2021 and 0.4% in 2022. Nevertheless, it’s a large title within the insurance coverage trade, and the supplier in the end determined it was higher off exiting this market to guard its general mixed working ratio.
That each a big world insurer and one that’s trusted by shoppers in different strains (well being) ended up leaving the motor insurance coverage market is a worrying development. The strikes emphasise simply how exhausting it’s to enter the UK motor insurance coverage house within the present local weather.
The third-largest participant within the UK motor insurance coverage market (with a share of 8.3% in 2022), Direct Line has taken an alternate route. It has launched a motor possession app referred to as Caha. The aim of this app is to assist clients handle and retailer all of their driving paperwork in a single place. It additionally has options resembling discovering parking areas. That is doubtlessly a solution to enhance retention charges and appeal to new clients by making the general proposition stronger. It’s exhausting for insurers to chop premiums at current amid such excessive claims inflation, so different methods they will strengthen their proposition and add worth seems a smart technique. Total, the larger gamers look set to extend their dominance over the UK motor insurance coverage market. They’ve extra functionality to resist this troublesome interval, and presumably even provide clients further advantages resembling Direct Line is starting to do. Consequently, we count on to see extra suppliers with smaller shares of the market reduce their losses, following RSA’s and Vitality’s lead.