Challenger financial institution Monzo has entered the UK house insurance coverage market to supply contents cowl, and this could show widespread given UK shoppers’ choice for digital channels. Monzo has recognised the low penetration charges for contents insurance coverage particularly, and GlobalData knowledge exhibits that younger shoppers and renters current a major alternative for contents-only insurers.
GlobalData’s 2024 UK Insurance coverage Shopper Survey discovered that solely 44.3% of renters have a house insurance coverage coverage—this group solely requires contents cowl. This compares to a penetration charge of 90.2% for owners (with a mortgage). Moreover, solely 38.4% of adults beneath the age of 30 who lease have house insurance coverage cowl. That is subsequently an enormous market alternative. Our survey additionally finds that over half (61.0%) of under-30s buy house insurance coverage on-line (both through laptop computer, smartphone, or a app), so a financial institution that specialises within the digital channel ought to be effectively positioned to achieve this client group.
Younger adults and renters have at all times been a difficult group for insurers to achieve. Monzo is providing easy insurance policies through its app with a fast sign-up course of, which ought to attraction to youthful clients. The method includes answering solely 5 inquiries to obtain a quote. The penetration charge for renters will at all times be effectively beneath owners because of the have to have buildings cowl, however the distinction at current is huge and does depart folks weak. Monzo itself estimated that renters may have round £12,000 ($15,600) of belongings unprotected.
Monzo would be the model behind the coverage, though it is going to be underwritten by Chubb. It may spark an increase within the bancassurance channel, which has remained static within the UK over the previous few years. 13.7% of shoppers bought house insurance coverage through banks in 2024, which is a rise on 11.9% in 2023 however beneath 15.0% in 2022. This means there’s a stable buyer base for bancassurance resulting from add-ons to accounts or model belief, however there’s little proof of huge progress within the channel. General although, family clients are open to utilizing the financial institution channel, and there’s a sizable alternative for insurers because of the low penetration charges for contents-only insurance policies. Monzo concentrating on this space with digital insurance policies subsequently seems to be a wise transfer.