sidiaries of General Accident and Eagle Star. Direct writing was the fastest
growing delivery system for motor insurance.
The UK household insurance market
There were few good available statistics on the household insurance
market. However, the basis for such insurance was house ownership. It
was estimated there were some 23 million homes in the UK, two-thirds of
which were privately owned. On 75 per cent of houses either owner occu-
pied or privately rented there was a need for structural insurance. A lower
percentage of households had contents insurance coverage.
Premium income growth proceeded steadily during the 1980s but claims
grew rapidly in the early 1990s due to weather losses and by dry weather
leading to a sharp increase in subsidence claims. There were also substan-
tial increases in claims for theft.
The sale of household insurance was concentrated in the hands of the
building societies. The leading insurers were all linked to particular soci-
eties and the top seven insurers held some 59 per cent of the market in
- In addition, company agents held a 27 per cent market share, and
direct marketing operations had achieved a 9 per cent penetration by 1991,
again led by Direct Line. Other direct writers were still mainly at the entry
phase of the market.
The customer market domain: Managing relationships with buyers 119
Table 2.5.2 Market share of the direct response writers in the UK private motor
industry1991 1992
Premium Market No. of Premium Market No. of
(£m) share policies in (£m) share policies in
(%) force (000) (%) force (000)Direct Line 84 2.1 411 159 3.5 670
Churchill 35 0.9 179 70 1.5 300
TIS (Royal) 44 1.1 292 60 1.3 314
GA 121 37 e 0.9 175 48 e 1.0 180
Eagle Star Direct 16 e 0.4 55 38 e 0.8 115
Smaller operators 15 e 0.4 75 30 e 0.7 125
Total 231 e 5.8 1187 405 e 8.8 1704Source: Gerrard Vivian Gray.Note: e = estimate.