Insurance Trends and Opportunities :Econometric and UK Consumer Trends

Contents

Market Environment Advertising MarketConsumer Trends

Consumer Trends – Insurance

Consumer expenditure on insuranceIn billions, at current and constant 2005 prices

nVision/Experian forecast, February 2010-based projection (based on Q3 2009 data)

£0

£5

£10

£15

£20

£25

£30

£35

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Current prices Constant 2005 prices

Source: Experian/nVisionBase: UK

General insurance product ownership•Insurance product ownership, August 2010

72

68

57

36

27

24

22

20

16

16

15

14

13

0 10 20 30 40 50 60 70 80

Car insurance

Contents insurance

Buildings insurance

Annual travel insurance

Home emergency cover

Medical/Health insurance

Card protection insurance

Mobile phone insurance

Pet insurance

Legal expenses insurance

Personal accident insurance

ID theft insurance

Other type of insurance

%

Source: GMI/Mintel

Base: 2,000 internet users aged 16+

© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

• Private motor and domestic property insurance are and remain the largest sectors of the insurance market

• Difficult economic conditions saw premium income decline across many general insurance products during 2009. Commercial products and discretionary products were among the worst affected.

Purchasing or renewing insurance online

...of consumers expect to purchase or renew insurance online via either an insurer’s website or an aggregator

Two-thirds...

66%

Source: Accenture/nVisionBase: 3,555 respondents aged 18+ in 6 countries, 2010

Compared prices online forecast% of adults who have compared prices online in the last 6 months“Which of the following, if any, have you done on the Internet in the last 6 months…Compared/looked up prices for any product or service ?” nVision forecast – Summer 2010 based projection

Source: nVision ResearchBase: 1,000 face-to-face respondents aged 16+, GB

Price comparison sites are set to grow in the coming years and will continue to play a major role in the insurance market

Insurance and customer loyalty

UK consumers are most likely to ‘chop and change’

when it comes to purchasing or renewing

insurance, with only 29% showing loyalty by

remaining with their current provider

Source: Accenture/nVisionBase: 3,555 respondents aged 18+ in 6 countries, 2010

I stayed with my existing insurer but only after shopping

around42%

I switched to a different insurer

30%

I stayed with my existing insurer and didn’t shop around

24%

It’s my first insurance policy and I’ve yet to

renew it2%

Don’t know2%

CAR INSURANCE RENEWAL BEHAVIOUR, JANUARY 2011

Base: 1,140 adults aged 17+ who hold a car insurance policy

“Thinking about the last time you renewed your car insurance policy, which of the following statements apply?”

SOURCE: GMI/MINTEL

30% of policyholders switched providers at last renewal

• Three in ten motor insurance policyholders switched to a different provider at their last renewal.

• Around a quarter stayed with their existing insurer and didn’t bother to look for a better deal.

• More than two fifths shopped around at their last renewal but opted to remain with their existing insurer.

• Female policyholders are more likely than their male counterparts to switch insurers.

• The likelihood to switch reduces with age, with under-45s the most likely to have moved between insurers at their last renewal.

© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

“I think that it is more important than ever to have good insurance cover”% who agree or agree strongly, by gender, age and social grade

0%

10%

20%

30%

40%

50%

60%

70%

To

tal

Ma

le

Fe

ma

le

16

-24

25

-34

35

-44

45

-54

55

-64

65

+

AB

C1

C2

DE

Agree strongly Agree

Source: RSA/The Future Foundation/nVisionBase: 1,000 respondents aged 16+, UK, 2009

As a result of the changing economic conditions, people feel that is now more important to be protected

Advertising Climate

Media Spend• Financial

advertisers tend to spend the most on advertising on TV and Direct mail advertising followed by the Press

• On average the industry spent around 6% on Internet advertising (not including search)

Source: NNR adDynanix : 2009 - 2010

Impressions and Audience by Publisher - AdMetrix

• While Microsoft does not have the most impressions for this sector, it does have the most Unique Visitors

Bing Traffic KPIsOverall Insurance Traffic

• Insurance overall was down 9% in traffic for 2010 year on year

• However 2011 has seen strong growth so far with a 41% year on year increase in traffic for January-March

Product Traffic increases for 2010 (JAN-MAR)

• Car Insurance – up 62%• Home Insurance – up 14%• Life Insurance – up 26%• Generic Insurance – up

142%1. Microsoft Advertising Intelligence Tool

Bing Finance Searchers are…

Source: NNR JULY 2010 – JANUARY 2011

Insurance KW Demographics and Daily Trends:

1. Microsoft Advertising Intelligence Tool

Microsoft Media Network Trends

Network Demographics •66% of the impressions occur between 18 and 44, while a similar proportion of clicks occur in the higher age brackets, 25-54•Impressions and conversions peak in the 18-24 for females while the 25-34 peak is more male biased•53% of conversion occur between the 18-34 age bracket•Conversions for Finance usually entail a quote or an application

Source: Microsoft Media Network : July 2010 – March 2011

Network: Day of the Week• There is a slight decline in impressions through out the week

however consumers are more likely to click during first half of the work week and on Sunday

• Conversions have two peaks on Tuesday as well as at the end of the week on Friday

Source: Microsoft Media Network : July 2010 – March 2011

Network: Time of Day• There is a build of

Impressions and Actions during the early afternoon and a slight elevation in the early evening

• There is one main peak that occurs post-lunch before the end of the work day

Source: Microsoft Media Network : July 2010 – March 2011

Finance OpportunitiesPositioning and PricingBecause of so many variables in the market place, positioning of your product is key

Demographic/MosaicThe users and searchers for this type of product index well in demographic sectors and can be targeting with our Mosaic offering

Search and Display – Better TogetherUse both offerings to help boost your ROI moreover, use our display offering to help boost your brand campaign. Particularly when we have seen good increases in traffic in the start of 2011