Vehicle Recovery - UK - September 2017

Vehicle Recovery - UK - September 2017

Sep 2017 Mintel RetailN/A Price :
$ 2571
The vehicle recovery market continues to grow and develop, boosted primarily by an ever expanding car parc. Although mature and highly competitive it is continuing to evolve, with recent attention being given to new styles of policy and the use of technology. Although dominated by three major players,, smaller companies are slowly growing their share of sales.
Table of contents

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Revenues approach 1.7 billion as market continues to expand
Figure 1: Best- and worst-case forecasts of vehicle recovery market, by value, 2012-22
Most policies provide comprehensive cover
Figure 2: Segmentation of the vehicle recovery market (value), by policy type, 2016
Free or reduced-price insurance dominates the market
Figure 3: Key channels used for purchasing breakdown recovery insurance, 2011-17
The UKs car parc is slowly ageing
Figure 4: Age structure of the car parc in years, 2012 and 2016
Companies and brands
Big three account for 85% of policies
Figure 5: Company shares of the vehicle recovery market, by UK membership, 2017
AA performs the strongest amongst consumers
Figure 6: Attitudes towards and usage of selected brands, July 2017
Telematics comes of age
Advertising investment in steady decline
Figure 7: Total above-the-line, online display and direct mail advertising expenditure on breakdown recovery, 2013-16
The consumer
Smaller companies are taking a growing share of the market
Figure 8: Ownership of breakdown cover, by recovery organisation, 2011-17
Price dominates as the most important factor when selecting a company
Figure 9: Factors considered when selecting a provider of breakdown cover, July 2017
Included with car insurance and buying online account for around a half of purchases
Figure 10: Key means by which current breakdown cover for your main vehicle was acquired, July 2017
Roadside assistance is the most popular form of help sought
Figure 11: Use of vehicle recovery services by those who hold vehicle recovery, July 2017
Alternatives to traditional insurance policies provoke interest
Figure 12: Interest in different payment methods for vehicle recovery insurance, July 2017
What we think
ISSUES AND INSIGHTS
Recent rise in IPT only serves to strengthen focus on price
The facts
The implications
Buying direct online appears to be in decline
The facts
The implications
Opportunities for new styles of policy
The facts
The implications
THE MARKET WHAT YOU NEED TO KNOW
Vehicle recovery market continues to demonstrate growth
Average premiums boosted by rises in IPT
Indirect sales dominate the market
Expansion in car parc is a major driver
MARKET SIZE AND FORECAST
Revenues show signs of strengthening
Figure 13: Best- and worst-case forecasts of vehicle recovery market, by value, 2012-22
Figure 14: UK vehicle recovery market, by value, at current and constant prices, 2012-22
Forecast methodology
MARKET SEGMENTATION
Regular membership market records strong growth
Figure 15: Segmentation of the vehicle recovery market, by value, at current prices, 2012-17
Average premium prices showing evidence of recovery
Figure 16: Average premium paid, 2012-17
Comprehensive policies facing competition from those with restrictions
Figure 17: Segmentation of the vehicle recovery market (value), by policy type, 2016
Policies sold direct are the most valuable segment
Figure 18: Segmentation of the vehicle recovery market (value), by direct/indirect channels, 2016
CHANNELS TO MARKET
Free or reduced-price insurance dominates the market
Online sales fall as other channels increase
Figure 19: Key channels used for purchasing breakdown recovery insurance, 2011-17
MARKET DRIVERS
The UK car parc is ageing
Figure 20: Age structure of the car parc in years, 2012, 2014 and 2016
helped by a strong used market and recent growth in overall sales
Figure 21: New and used car market volumes, 2012-17
Falling prices for second-hand cars increasingly make them affordable
Figure 22: Price indices of new and used cars, 2002-16
Over half of adults plan to buy a car in the next three years
Figure 23: Intention to purchase a car in the next 3 years, February 2017
Fuel prices have also recently begun to increase after falling back
Figure 24: Average annual retail prices of petroleum products and a crude oil price index, at current prices, January 2000-July 2017
Rises in IPT impact directly on vehicle recovery insurance
Figure 25: Insurance premium tax rates, 1997-2017
Cars dominate over other forms of transport
Figure 26: Mode share (average distance travelled), England, 2015
although personal mobility appears to be in decline
Figure 27: Trips, distance travelled and time taken, 2005-15
A growing an ageing population should present opportunities
Figure 28: Trends in the age structure of the UK population, 2011-21
COMPANIES AND BRANDS WHAT YOU NEED TO KNOW
Dominant big 3 face growing competition
Range of competitive strategies employed to attract customers
Telematics leads what is a number of areas of development
Investment in promoting services shows steady decline
MARKET SHARE
Three established players facing increased competition
Vehicle recovery membership approaches 30 million
Figure 29: Company shares of the vehicle recovery market, by uk membership, 2011-17
Call Assist is the largest of the others in the market
Figure 30: Share of others in the market, by UK membership, 2016
COMPETITIVE STRATEGIES
Roadside assistance is a key competitive battleground
Figure 31: Review of roadside assistance prices and packages, July 2017
Technology is emerging as a disruptor
Upfront payment versus deferred payment
Short-term offers are popular with the big 3
Figure 32: Key short term offers from vehicle recovery companies, July 2017
Use of partnerships to extend market coverage
Retailers
Financial institutions
Figure 33: Packaged current accounts that offer breakdown cover, 2017
Vehicle manufacturers
Figure 34: Selected car manufacturer-branded breakdown cover on new purchases, 2017
LAUNCH ACTIVITY AND INNOVATION
Car Genie promises advanced telematics
Figure 35: AA Car Genie
as does Green Flag with its Alert Me system
Figure 36: Green Flag Alert me
Proof of breakdownthe roadside selfie service
Car breakdown cover plan designed to protect the most vulnerable motorists
Roadside breakdown service based on Uber model
ADVERTISING AND MARKETING ACTIVITY
Advertising in steady decline
Figure 37: Total above-the-line, online display and direct mail advertising expenditure on breakdown recovery, 2013-16
Summer is a popular time for expenditure
Figure 38: Recorded above-the-line, online display and direct mail total advertising expenditure on breakdown recovery, by month, 2016
RAC and AA pull back their investment
Figure 39: Recorded above-the-line, online display and direct mail total advertising expenditure on breakdown recovery, by advertiser, 2013-16
Television and direct mail dominate with digital showing strong growth
Figure 40: Recorded above-the-line, online display and direct mail total advertising expenditure on breakdown recovery, by media type, 2013-16
Nielsen Ad Intel coverage
BRAND RESEARCH
AA leads the market in terms of consumer attitudes
Figure 41: Attitudes towards and usage of selected brands, July 2017
Key brand metrics
Figure 42: Key metrics for selected brands, July 2017
Brand attitudes: major players are positioned in different areas of the market
Figure 43: Attitudes, by brand, July 2017
Brand personality: the big 3 have some of the most appealing personality elements
Figure 44: Brand personality Macro image, July 2017
with the AA and RAC the strongest overall
Figure 45: Brand personality Micro image, July 2017
THE CONSUMER WHAT YOU NEED TO KNOW
AA has a commanding presence within the market
Price is a clear favourite with buyers
Majority of drivers have experience of roadside assistance
Traditional insurance faces from a number of alternatives
PRESENCE OF RECOVERY ORGANISATIONS
AA is the dominant name in the market
Figure 46: Ownership of breakdown cover, by recovery organisation, July 2017
The AA proves popular with young and affluent adults
Older adults and less affluent more likely to opt for smaller companies
Partnerships with car manufacturers favour owners of new cars
Smaller organisations represent a real challenge to the big 3
Figure 47: Ownership of breakdown cover, by recovery organisation, 2011-17
SELECTING A PROVIDER
Price dominates when selecting a company
Figure 48: Factors considered when selecting a provider of breakdown cover, July 2017
Older adults want it all
Features and innovations are popular with a number of specific groups
Socio-economic status and income favour use of multiple factors when choosing insurance
Price and non-price factors are of interest to specific groups
HOW COVER IS ACQUIRED
Vehicle insurance leads as a way of acquiring recovery insurance
Figure 49: Key means by which current breakdown cover for your main vehicle was acquired, July 2017
Having recovery insurance included with vehicle insurance attracts a range of groups
Online is not simply the preserve of young adults
Partnering is an important way of achieving sales
Online and telephone is a popular route for those focused on price
Websites are more popular than apps for online buyers
Figure 50: Key means by which current breakdown cover for your main vehicle was acquired, July 2017
Men and women exhibit different preferences towards websites
Price comparison websites popular with certain groups
Manufacturer websites popular with past use of a company
FREQUENCY OF USE
Roadside assistance is the most popular form of assistance
Figure 51: Use of vehicle recovery services by those who hold vehicle recovery, July 2017
Young adults are a key market of all types of assistance
Affluence is also factor in demand for services
Experience of using recovery services is growing
Figure 52: Use of vehicle recovery services by those who hold vehicle recovery, 2015 and 2017
FUTURE POLICY TYPES
Traditional insurance policies are not popular with all
Figure 53: Interest in different payment methods for vehicle recovery insurance, July 2017
Older adults remain core audience for traditional insurance policies
Wealthy socio-economic groups are most likely to look for alternatives
PAYU insurance is popular with wealthy adults
while families with young children also want something different
New car owners are a target market for reclaim and PAYU policies
... which are also favoured by those interested in non-price benefits
APPENDIX DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX MARKET SIZE AND FORECAST
Data Sources
Market sizing and segment performance
Forecast Methodology
Forecast Data
Figure 54: Forecast of UK vehicle recovery market (value) best- and worst-case scenarios, 2017-22

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