Recessionary Consumers & Product Choice

Publication Date	June 2008
Publisher	Datamonitor
Product Type	Report
Pages	57
ISBN Number	not applicable
Product Code	DAT12370

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Summary

Introduction

Uncertainty currently clouds the economic prospects of both the US and world economies. This is because the US economy for the past decade has represented around 30% percent of the world total. The deepening international economic downturn is encouraging consumers to adjust their attitudes towards consumption but a gap exists however between shifting attitudes and actual behaviors

Scope

Insightful analysis documenting the drivers behind consumers' increasingly recessionary attitudes and behaviors
Qualitative examination of how, why, and to what extent consumers' recessionary concerns are changing actual consumption in the CPG space
Detailed action points offering practical strategies based on the trends and insights analyzed in the report
Covering nine core countries across Europe, North America and Australasia; France, Germany, Italy, Netherlands, Spain, Sweden, UK, US and Australia

Highlights

Maintaining brand support through difficult times helps take advantage of competitors who often reduce marketing efforts. As consumers spend more time considering options before they spend money, this increases the likelihood of getting their attention with effective communications

Consumers may feel increasingly pessimistic and pressured by the negative economic environment, but this does not necessarily lead to a change in their behavior. An attitude-behavior gap exists making it essential for the CPG industry to be clear on the difference between what consumers are saying and when/if they actually start acting on it

Premium CPG products have in-built advantages in a recessionary environment. Dedicated premium consumers either tend to have income advantages supporting their consumption behavior or will make sacrifices in other areas to maintain their premium spending

Reasons to Purchase

Improve decision making: cutting marketing spend can be a mistake; use this report to understand the tactics required for success in a recession
Understand the key issues affecting consumers' FMCG consumption against the backdrop of a recession
Access insightful qualitative data aggregating the most compelling and recent research in this timely and important topic

Content

Datamonitor View
Catalyst
Summary
Market Context
- Introduction
- Despite Falling Gwp, The Commercial Property Insurance Market Made A Respectable Return In 2006
- Gwp In The Commercial Property Market Continued To Fall In 2007
- Commercial Property Insurance Remained Profitable In 2006 Albeit At Lower Levels
- Market Expense And Claims Ratios Showed Little Movement
- The Claims Ratio Remained Fairly Static In 2006
- The Expense Ratio Experienced The Greatest Movement Between 2005 And 2006
- The Underwriting Ratio Suffered A Negligible Deterioration In 2006
- Commercial Property Claims Costs Soared In 2007 Due To The Summer Floods
- The Summer Floods Effectively Pushed Weather-Related Claims Costs Up Significantly In 2007
- Weather Claims Costs Were Much Higher In 2007
- Business Interruption Costs Following Both Fire And Weather Damage Rose In 2007
- The Increase In The Total Cost Of Theft Claims Was Mainly Driven By An Increase In The Total Number Of Claims
- The Summer Weather Events Were Estimated To Cost The Industry 3 Billion
- The Windstorm Kyrill Left Insurers With An Estimated Bill Of 350m
- Heavy Rainfall In Both June And July Led To Flooding In Various Locations Across The Uk Costing The Insurance Industry An Estimated 3 Billion
- Insurers Believe That Commercial Property Fire Regulation Should Be Reformed
- Despite A Blaze At A Cornish Hotel, The Number Of Commercial Property Fires Was Down Even Though Overall Costs Were Not
- Insurers Are Alarmed Over Non-Existent Government Measures Regarding The Prevention Of Warehouse Fires
- The Impact Of Fires On Modern Construction Is Not Always Fully Known
Future Decoded
- Introduction
- Under The Neutral Scenario The Market Makes An Underwriting Profit Between 2008 And 2012
- The Commercial Property Market Moves Into A Loss As Fierce Competition Maintains Downward Pressure On Premiums
- Datamonitor Forecasts That After Contracting In 2007, The Commercial Property Market Will Grow To 5.4 Billion In Gwp By 2012
- The Commercial Property Market Experienced A Large Underwriting Loss In 2007 But Is Forecast To Make Underwriting Profits From 2008 Onwards
- The Market Remains Unprofitable In Our Pessimistic Scenario Throughout The Forecast Period
- The Market Experiences Intense Competition In 2007 And Pressure Continues To Be Exerted On Rates For Longer Than Anticipated
- The Market Is Expected To Contract Sharply Again In 2008 Under This Pessimistic Scenario
- The Market Is Estimated To Have Made A Large Underwriting Loss In 2007 And Is Forecast To Remain Unprofitable
- In The Optimistic Scenario, Commercial Property Insurance Gwp Increased Steadily Between 2008 And 2012 And The Market Makes Solid Underwriting Profits
- After Intense Price Competition In 2007, The Market Sees Prices Rise In 2008 And Thereafter
- The Commercial Property Insurance Market Experiences Strong Growth After A Dip In 2007
- The Commercial Property Insurance Market Returns To Profitability In 2008
Appendix
- Definitions
- Abi Definitions
- Brokers
- National Brokers
- Chain Brokers & Telebrokers
- Other Intermediaries & Brokers
- Direct
- Other Company Agents
- Utilities/Retailers/Affinity Groups
- Company Staff
- Banks/Building Societies
- Written Premiums
- Gross Premiums
- Synthesys Non-Life Database Definitions
- Total Commercial Property
- Further Reading
- Ask The Analyst
- Datamonitor Consulting
- Disclaimer
- List Of Tables
- Table 1: Commercial Property Insurance Gwp, 2002-07e
- Table 2: Commercial Property Insurance Underwriting Account, 2002-06
- Table 3: Commercial Property Insurance Claims, Expense And Underwriting Ratios, 2002-06
- Table 4: Gross Incurred Commercial Property Claims By Peril, 2003-07 (m)
- Table 5: Weather-Related Claims Costs For Commercial Property Insurance, 2003-07 (m)
- Table 6: Costs Of Business Interruption Claims By Cause, 2003-07 (m)
- Table 7: Cost, Volume And Average Value Of Commercial Property Theft Claims, 2003-07
- Table 8: Neutral Scenario: Key Variables Affecting Commercial Property Insurance Gwp, 2007e-2012f
- Table 9: Neutral Scenario: Forecast Gwp For The Commercial Property Market, 2002-2012f
- Table 10: Neutral Scenario: Forecast Underwriting Result For Commercial Property, 2002-12
- Table 11: Pessimistic Scenario: Key Variables Affecting Commercial Property Insurance Gwp, 2007e-2012f
- Table 12: Pessimistic Scenario: Forecast Gwp For The Commercial Property Market, 2007e-2012f
- Table 13: Pessimistic Scenario: Forecast Underwriting Result For The Commercial Property Insurance Market, 2002-2012f
- Table 14: Optimistic Scenario: Key Variables Affecting Commercial Property Insurance Gwp, 2007e-2012f
- Table 15: Optimistic Scenario: Forecast Gwp Growth, 2007e-2012f
- Table 16: Optimistic Scenario: Forecast Underwriting Result For The Commercial Property Market, 2002-2012f
- List Of Figures
- Figure 1: The Commercial Property Underwriting Result Decreased In 2006
- Figure 2: The Commercial Property Insurance Underwriting Ratio Fell Slightly In 2006 As The Expense Ratio Rose
- Figure 3: Weather Claims Costs Increased Significantly In 2007, While Other Costs Remained Fairly Flat
- Figure 4: The Cost Of Commercial Property Weather-Related Claims Grew Significantly In 2007
- Figure 5: The Surge In Business Interruption Costs Was Driven By Claims Following Weather Damage
- Figure 6: In 2007, The Number Of Theft Claims Began To Increase, While Average Value Leveled Off
- Figure 7: Under Our Neutral Scenario, Gwp Declines Further In 2008 Before Experiencing Solid Growth Between 2009 And 2012
- Figure 8: Under Our Neutral Scenario The Market Makes An Underwriting Profit Between 2008 And 2012
- Figure 9: Under Our Pessimistic Scenario, Gwp Grows Less Than 1% Annually Between 2007 And 2012
- Figure 10: Under Our Pessimistic Scenario The Market Remains Unprofitable
- Figure 11: Under Our Optimistic Scenario, Commercial Property Insurance Gwp Is Set To Reach 6.1 Billion In 2012
- Figure 12: Under Our Optimistic Scenario The Market Makes Strong Profits