Trust in the foundations: Industry revenue has been hit by downward pricing pressures

Home insurance is an important segment of the General Insurance industry (IBISWorld report K65.120), as property insurance accounts for the second largest share of premium income, behind only motor insurance. The industry generates income from two key sources: premium income and investment income. Premium income refers to net premium income.In 2018-19, investment and premium income are estimated to account for approximately 20.1% and 79.9% of industry revenue, respectively. Despite year-on-year volatility, investment income has broadly trended upwards, supported by monetary policy easing, historically low interest rates, and a weak pound. However, premium income has not fared so more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Premium income has come under pressure, although investment has limited contraction
  • A number of industry enterprises have been forced to leave the market over the past five years
  • Despite strong downward pricing pressures, the industry is likely to remain in the hardening cycle
  • Industry Report - Industry Key Buyers Chapter

    The market share for the major players is based on the industry's net premium income as opposed to total revenue. Net written premium is generally considered a better indication of a major player's market share because it more accurately measures a company's exposure to the home insurance market. In contrast, total company revenue can be skewed by investment returns, which behave stochastically, fluctuate with economic conditions and can be affected by the investment strategy an insurer employs.The Home Insurance industry displays a low level of market share concentration. The four largest companies in the industry are estimated to account for 36.1% of net home insurance premiums in 2018-19. Direct Line Group is the largest company, with a market share of 10.4%. Due...purchase to read more.

    Additional Insights for the Home Insurance Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Home Insurance Industry are

  • Ability to effectively manage risk
  • Management of a high quality assets portfolio
  • Having a cost effective distribution system
  • IBISWorld analysts also discuss how external factors such as year bond rate and Damage caused by natural disasters in the Home Insurance industry impact industry performance..

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    What's in this report

    What is the Home Insurance Industry?

    Companies in this industry underwrite home insurance policies. This means they assume the risk for the insurance and decide the appropriate premium. These policies protect against loss of or damage to property and contents due to theft, fire and other causes.

    Industry Products
  • Property insurance
  • Contents insurance
  • Combined property and contents
  • Specialist insurance
  • Industry Activities
  • Insuring property
  • Insuring contents
  • Providing specialty property and contents insurance
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • year bond rate
  • Damage caused by natural disasters
  • FTSE 100
  • Number of households
  • Real household disposable income

  • Current Performance
  • Investment income
  • Premium income
  • Competition and pricing pressures
  • Hardening cycle
  • Competitive landscape and profit
  • Chart: Revenue Growth

  • Industry Outlook
  • Investment income
  • Premium income
  • Technology and

    new products

  • Competitive landscape and profit
  • Table: Home Insurance Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Home Insurance Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Insurance Agents & Brokers
  • Reinsurance

  • Products & Services
  • Combined property and contents
  • Property insurance
  • Contents insurance
  • Specialist insurance
  • Chart: Home Insurance Industry Products and Services Segmentation

  • Demand Determinants
  • Residentials transactions, number of households and homeowner profile
  • Wealth and rising house prices
  • Disasters

  • Major Markets
  • People aged between 30 and 49
  • People aged between 50 and 64
  • People aged between 65 and 74
  • People aged under 30
  • People aged 75 and over
  • Chart: Major Market Segmentation for the Home Insurance Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitClaims and policy paymentsCommission and brokerage expensesUnderwriting expensesWagesOtherReinsurance
  • Chart: Cost Structure Benchmarking – Sector vs Home Insurance

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Home Insurance Industry

  • Industry Globalization
    Direct Line Insurance Group plc, Aviva plc, Lloyds Banking Group plc, RSA Insurance Group plc, AXA UK plc,
  • Table: Direct Line Insurance Group plc - financial performance
  • Table: Aviva plc - financial performance
  • Table: Lloyds Banking Group plc - financial performance
  • Table: RSA Insurance Group plc - financial performance
  • Table: AXA UK plc - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Home Insurance Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Home Insurance Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • The maximum amount of insurance a company can underwrite based on its financial strength.
  • Cessation Ratio
  • The proportion of insurance that an insurer cedes, or passes on, to a reinsurer.
  • Net Premium Income
  • The sum of premium income earned by an insurance company, less premiums ceded to reinsurance companies, plus any reinsurance assumed.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Home Insurance market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Home Insurance:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Home Insurance market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Home Insurance, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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