UK Motorcycle Insurance 2006

Content

• Chapter 1 Introduction
  • What is this report about?
  • Who is the target reader?
  • How to use this report
• Chapter 2 Market Context
  • Introduction
  • Competitive pressure in the motorcycle market kept growth low in 2005 and 2006
  • Competitive pressures kept premium rates flat in 2005, but a small increase in the number of vehicles helped secure modest GWP growth
  • High levels of competition continued in 2006, further subduing GWP growth
  • The two main drivers of GWP growth, premium rates and vehicle numbers, pulled in different directions in 2005
  • Motorcycle premium rates were mainly flat in 2005, and declined further in 2006
  • The motorcycle parc is growing steadily, maintaining overall market growth
  • The motorcycle parc is getting older, as the number of new registrations falls
  • Powerbikes dominate the motorcycle parc, with the smallest vehicles being second most popular
  • The Honda CBR 1000 RR was the most popular bike in 2006
• Chapter 3 Claims
  • Introduction
  • Motorcycle claims inflation is driven by personal injury costs, repair costs, and motorcycle theft rates
  • Personal injury claims costs are the primary driver of claims inflation, while repair costs and theft rates play secondary roles
  • Fraud plays a role, although it is not considered to be a driver of claims inflation
  • Both the number and rate of motorcycle casualties have fallen since 2001, with beneficial consequences for personal injury costs
  • Stricter pass rates in motorcycle tests contribute to safer riding standards
  • It is not the number of personal injury claims but their cost that is a problem for insurers
  • The number of motor personal injury claims increased by 7.5 per cent in 2004/5, but overall numbers have not changed significantly in the last five years
  • Motorcycle theft numbers grew between 2001 and 2003, but frequency of theft decreased as vehicle numbers rose
  • New bikes of less than 125cc are most at risk from theft
  • Insurers have adopted a number of strategies to combat claims inflation
  • There are a number of initiatives focused on reducing private motor claims costs, and a few are for motorcycle insurance specifically
  • Rehabilitation is increasingly seen as an important strategy in controlling costs
  • Rapid treatment care could save on bodily injury claims costs
  • Insurers set up repair networks to combat garage costs
  • Tracker debuts a motorcycle product but most insurers see little impact, due to high costs to the public
• Chapter 4 Competitive Dynamics
  • Introduction
  • New entrants to the motorcycle market are scarce but existing players looking to write more business in this sector have kept competition levels high
  • New entrants to the motorcycle market have been rare in recent years
  • Competition levels were high in 2005 due to mid-sized players looking to increase their exposure to motorcycle insurance
  • In 2006, the biggest players were the main source of competition
  • Some insurers targeted market share in 2005, while others suffered due to increased competition
  • Some players grew their motorcycle books in 2005
  • Five players saw their motorcycle books come under attack in 2005
  • Specialist brokers remain the main distribution channel in motorcycle insurance and have a strong influence over the market, while other distribution channels play secondary roles
  • The direct channel has made little headway in the motorcycle market
  • Motorcycle manufacturers and dealers form an important part of the distribution picture
  • However, brokers remain secure in their dominance of the motorcycle insurance market
  • The amount spent on motorcycle advertising fell in 2005, as some manufacturers reduced their advertising budgets significantly
  • Brokers dominated advertising spend in 2005, with motorcycle manufacturers spending less than in 2004
  • Devitt and Bennetts spent by far the largest amounts on advertising in 2005
• Chapter 5 The Future Decoded
  • Introduction
  • Motorcycle GWP is expected to display short-term stagnation, followed by steady increases
  • The motorcycle market is forecast to reach a value of 230 million in 2011
  • Premium rate decreases kept GWP growth subdued in 2006
  • GWP growth is forecast to rebound in the second half of 2007 as competitive pressures ease
  • Future GWP growth will increasingly rely on premium rate increases
  • The industry fears that an EU Directive will have a negative effect on the growth of the motorcycle market
• Chapter 6 Appendix
  • Supplementary data
  • Definitions
  • Research methodology
  • Primary research
  • Secondary research
  • Competitor data
  • GWP versus GEP reporting
  • Future readings
  • Relevant links
  • Datamonitor's custom research capabilities
  • SPP writing team
• List of Tables
  • Table 1: Motorcycle, private and total motor insurance GWP, 2001-6e
  • Table 2: Licensed motorcycles by taxation class as a proportion of total vehicle stock, 2001-5
  • Table 3: New registrations of motorcycles and all vehicles, 2001-5
  • Table 4: Motorcycle parc by engine size, 2001-5
  • Table 5: Top 10 new motorcycle registrations by brand, year to date, October 2006
  • Table 6: Motorcycle parc, motorcycle casualties and casualty rate, 2001-5
  • Table 7: Road accident casualties in the UK, 1995-2005
  • Table 8: Number of motorcycle tests and pass rate, 1995/6-2004/5
  • Table 9: Number of motor personal injury claims, 2001/2-2004/5
  • Table 10: Average cost of a motor personal injury claim, 2000-4
  • Table 11: Motorcycle premium income by competitor, 2001-5
  • Table 12: Top motorcycle insurance brokers by GWP and policy numbers, 2005
  • Table 13: Top 10 motorcycle insurance advertisers, 2004-5
  • Table 14: Top 10 motorcycle insurance advertisers by medium, 2005
  • Table 15: Motorcycle GWP forecast, 2001-11f
  • Table 16: UK motorcycle competitors by market share, 2001-5
  • Table 17: Top 10 motorcycle insurance advertisers, 2004
• List of Figures
  • Figure 1: Motorcycle GWP growth rebounded in 2005 from the fall seen in 2004
  • Figure 2: Growth in the motorcycle parc slowed in 2005
  • Figure 3: After a sharp contraction in 2004, new registrations leveled off in 2005
  • Figure 4: The motorcycle parc remains split between power bikes and small bikes
  • Figure 5: The motorcycle casualty rate is falling as a proportion of the motorcycle parc
  • Figure 6: The proportion of candidates passing their motorcycle test has fallen over the last decade
  • Figure 7: The number of motor personal injury claims increased in 2004/5, however there has been little change overall between 2001/2 and 2004/5
  • Figure 8: Equity Red Star remains the largest player recovering some market share in 2005
  • Figure 9: Manufacturers have a wide range of insurance offerings
  • Figure 10: Devitt and Bennetts spent far more on advertising than the rest of the market in 2005
  • Figure 11: Key to the relative importance of forecast variables
  • Figure 12: Assumptions for motorcycle GWP forecast
  • Figure 13: Growth in GWP is forecast to be steady after 2007
  • Figure 14: Datamonitor's core consulting capabilities