Legal expenses insurance (LEI) sales are underpinned by an established network of distributors, of which major insurance brands are the key providers. From this viewpoint, the LEI market has firm foundations. However, this market experienced a dip in value between 2002 and 2003 - but sales have revived steadily over the last few years reaching an estimated £411 million in gross written premiums (GWP) in 2005.

The main objectives of this report are to identify marketing opportunities in the legal expenses insurance sectors (eg home, motor) and to identify how the overall market has changed since Mintel' s last LEI report which was published in December 2004. This report provides an overview of developments in both the before-the-event (BTE) and after-the-event (ATE) sectors.

• Issues in the Market
• Abbreviations
• Market in Brief
• Be prepared for the impact of the Legal Services Bill
• Market growth has been slower in recent years
  • Figure 1: LEI market size, by GWP, 2000-05
• In the main the largest LEI providers have increased their market share
  • Figure 2: LEI market share, top five providers, 2005
• Longer-term figures show a decline in the number of road casualties
• The volume of compensation cases has been in decline since 2003/04
• Tactics vary among providers
• The Co-op manages accident claims in-house
• Existing advertising regulations found to cover personal injury sufficiently
• 35-44-year-olds were most likely to hold LEI
• Broadsheet readers are decent targets for LEI
• A third of consumers would use legal services provided by a bank
• Broader Market Environment
• The number of road accident casualties stood at 281,000 in 2004
  • Figure 3: Road accident casualties, 2000-04
• Roads are becoming safer
  • Figure 4: Road accident casualties, by type, 2000-04
• The level of employee fatalities and injuries has fallen
  • Figure 5: Fatalities and injuries, to employees and members of the public, 2000/01-2004/05
  • Figure 6: Possible claim amounts for common injuries, lower amounts, 2006
• Motor policy penetration stood at 70% of households in 2005
  • Figure 7: Penetration of domestic motor and home insurance, by type, 2001-05
• Reform has shaped claims
  • Figure 8: Access to justice reforms, 1999
• Regulatory review of legal services
• A new framework for claims management services
• FSA assumes responsibility for regulating insurance
• NHS Redress Bill -- legal reform in progress
• Government report says that we do not have a compensation culture
• Internal Market Environment
• Personal injury accounts for only 1% of writ cases
  • Figure 9: Writs and summonses issued, England & Wales, 1985-2004
• The number of new cases registered to the CRU is on a downward trend
  • Figure 10: Number of cases registered to CRU, 2001/02-2005/06
• CRU motor cases reached 461,000 in 2005/06
  • Figure 11: Number of cases registered to CRU, by type, 2001/02-2005/06
• Halifax moves into the legal services sector
• Competitive Context
• Inclusive versus optional
• Bought versus sold
• Strengths and Weaknesses in the Market
• BTE sector offers some certainty but reform might cause market upset
  • Figure 12: Summary chart of the LEI sector' s strengths and weaknesses, 2006
• Trade Perspective
• This will wipe out a large percentage of claims
• Large brands are expected to start selling off-the-shelf LEI
• LEI providers welcome regulation of claims management companies
• Consumer awareness continues to be very low
• Market Size and Forecast
• LEI penetration reaches 50%
  • Figure 13: Ownership of legal expenses insurance, by type, 2004 and 2006
  • Figure 14: Ownership of legal expenses insurance, population equivalent, September 2006
• Collection of market size data will resume in early 2007
• LEI GWP rose steadily between 2003 and 2005
  • Figure 15: LEI market size, ABI member and total market, by GWP, 2000-05
• The value of this market is projected to increase £52 million by 2011
  • Figure 16: Forecast for legal expenses insurance, by GWP, at current and constant prices, 2000-11
• Factors used in the forecast
• Market Share
• The Royal Bank of Scotland Group was the largest LEI provider in 2005
  • Figure 17: LEI market share, by GWP, 2003 and 2005
• Merger for Cox Insurance
• Companies and Products
• A brief history of the market
• The Royal Bank of Scotland Group
• DAS Legal Expenses Insurance Company
• Brit Insurance
• Allianz Cornhill Legal Protection
• FirstAssist
• Brand Communication and Promotion
• Government report on claims advertising finds no need for action
• Low awareness has been a long-standing concern
• Market advertising expenditure has grown fairly rapidly...
  • Figure 18: Accountants' and solicitors' total advertising expenditure, annual spend, July 2003-June 2006
• ...but relatively little advertising expenditure was allocated towards BTE
  • Figure 19: Advertising expenditure allocated toward selected insurance markets, July 2005-June 2006
• Television is the largest advertising channel for claims services
  • Figure 20: Accountants' and solicitors' advertising expenditure, by media outlet, July 2005-June 2006
• National Accident Helpline is the largest advertiser
  • Figure 21: Accountants and solicitors, top advertisers, July 2005-June 2006
• Channels to Market
• Underwriters supply a wide range of providers
  • Figure 22: LEI distribution model, September 2006
• Direct distribution underpins BTE sales
  • Figure 23: Motor insurance distribution, by channel, 2004-06
• Independent intermediaries gained in 2004
  • Figure 24: Distribution share of home insurance, based on GWP, by distribution channel, 2000-04
• Consumer Financial Activity
• Saving retains place at top of priorities
• Consumers will be subdued through the summer
  • Figure 25: Savings, investment, borrowing and debt repayment -- consumers' expected activity, March 2005-June 2006
• UK savings and spending climate
  • Figure 26: UK saving and spending climate -- indexed, January 2001-June 2006
• 23-29s are looking to be active
  • Figure 27: Expected financial activity by socio-demographic and income groups, June 2006 and average for the last 18 quarters
• Savings and life insurance come to the fore
  • Figure 28: Leading financial activities planned in the next six months, June 2005-June 2006
• First-time buyer activity will gradually recover
  • Figure 29: Intended mortgage and property purchase activity, June 2004-June 2006
• The Consumer -- Product Ownership and Risks Which Cause Most Concern
• LEI is most likely to be bought with car insurance
  • Figure 30: Ownership of legal expenses insurance, September 2004 and September 2006
• 50% of consumers held LEI
• ABs show a penchant for LEI
  • Figure 31: Ownership of legal expenses insurance, by gender, age, socio-economic group, marital status and lifestage, September 2006
• Implications
• ABC1 35-54s were most likely to hold LEI
  • Figure 32: Ownership of legal expenses insurance, by age/socio-economic group, working status and general household income, September 2006
• Implications
• Keyfacts and PR improve understanding
  • Figure 33: Ownership of legal expenses insurance, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, September 2006
• Implications
• The volume of RTAs has grown rapidly
  • Figure 34: Areas causing most concern, September 2006
• Younger people are most concerned about RTAs
  • Figure 35: Areas causing most concern, by gender, age, socio-economic group, marital status and lifestage, September 2006
• Implications
• Manual workers are sensitive to physical injury
  • Figure 36: Areas causing most concern, by age/socio-economic group, working status, tenure and TV region, September 2006
• Implications
• Popular tabloids are a decent outlet for LEI advertising
  • Figure 37: Areas causing most concern, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, September 2006
• Implications
• More than half of MULR holders are concerned about RTAs
  • Figure 38: Ownership of legal expenses insurance versus risks causing most concern, September 2006