Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
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- Figure 1: The vehicle recovery market, by value, 2009-19
- Market factors
- Companies, brands and innovation
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- Figure 2: Company share of the vehicle recovery market, by members, 2014
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- Figure 3: Key channels used for purchasing breakdown recovery insurance, June 2014
- The consumer
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- Figure 4: Ownership of breakdown cover, by recovery organisation, 2011-14
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- Figure 5: Most important factors when choosing breakdown cover, June 2014
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- Figure 6: Most important features sought from a breakdown insurance provider, June 2014
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- Figure 7: How breakdown cover was acquired, June 2014
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- Figure 8: Reasons for switching from existing provider, June 2014
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- Figure 9: Reasons for not having breakdown cover, June 2014
- What we think
Issues and Insights
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- Price erosion remains an issue
- The facts
- The implications
- Age, gender and income are important factors when choosing a company
- The facts
- The implications
- Is the age of long distance travel at an end?
- The facts
- The implications
Trend Applications
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- FSTR HYPR
- The Nouveau Poor
- Alpha Mothers
Market Environment
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- Key points
- New car sales return to pre-recessionary levels
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- Figure 10: UK new registrations of cars, 2009-14
- Trips taken and distance travelled are in steady decline
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- Figure 11: Trips, distance travelled and time taken, 2003-13
- Multiple car ownership remains steady
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- Figure 12: Percentage of households with car availability, in England, 1995-2013
- Expenditure on car purchasing climbs as motor expense remain significant
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- Figure 13: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2009-13
- Number of licence holders continues to expand
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- Figure 14: Number of licence holders, by age, 1975/76-2013
- Batteries and tyres dominate call-out demands
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- Figure 15: Top ten most common breakdown call-outs (AA roadside patrols only), 2011 and 2012
- Bundling with bank accounts and insurance policies
- Growth set to continue for the UK economy
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- Figure 16: GDP, PDI, consumer expenditure and savings, at current prices, 2009-19
- GDP growth will take time to strengthen
- Consumer expenditure set to expand faster
- GDP growth appears to be firmly on the up
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- Figure 17: GDP quarterly percentage change, Q1 2006 - Q4 2013
- Financial confidence begins to strengthen
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- Figure 18: GfK Consumer Confidence Index, January 1988 – February 2014
- Pain of high fuel prices may be easing
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- Figure 19: Monthly UK petrol, diesel and oil price trends, 2009-13**
- UK population moving socially downward
- An ageing population
Competitive Context
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- Key points
- Running costs outpace the value of new and used car market
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- Figure 20: UK transport market value by segment, 2008-13
- Fuel prices stabilise
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- Figure 21: Annual Petrol and Diesel price trends, 2000-13
- Inflation slows since 2012
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- Figure 22: Annual percentage change in transport costs, 2006-13
- Second-hand cars remain a competitively priced purchase
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- Figure 23: Prices indices of new and used cars, 1999-2013
- Economic slowdown hits road traffic figures
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- Figure 24: Road traffic (billion vehicle miles) in Great Britain, by vehicle type, 2000-13
- Economic slowdown hits travel plans
- Car mileage is yet to recover
Who’s Innovating?
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- Key points
- New treads
- Electric on the go
- From Green Flag with love
Strengths and Weaknesses
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- Strengths
- Weaknesses
Market Size and Forecast
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- Key points
- Revenue growth accelerates as economic recovery strengthens
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- Figure 25: UK vehicle recovery market, by value, at current and constant prices, 2009-19
- Entry of UK into recession depresses sector
- Improvements in UK economy bring about positive returns for the vehicle recovery sector
- Price competition grows in importance
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- Figure 26: Average premium paid, 2009-14
- The future
- Forecast
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- Figure 27: Best- and worst-case forecasts of vehicle recovery market, by value, 2009-19
Segment Performance
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- Key points
- Regular membership recovers
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- Figure 28: Segmentation of the vehicle recovery market, by value, at current prices, 2009-14
- Regular membership revenues top 85%
- Regular membership up as economy strengthens
- Price completion gives way to offers
Market Share
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- Key points
- AA continues to dominate the market
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- Figure 29: Company shares of the vehicle recovery market, by UK membership*, 2010-14
- Overall membership shows gradual expansion
- AA continues to dominate the market
- RAC strengthens its position as number two
- Green Flag underperforms
- Others maintain position as challengers
- New owners offer potential to invigorate market
- AA and RAC hike premiums for basic cover to focus on added value services
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- Figure 30: Prices of breakdown recovery products for the AA, RAC, Green Flag and LV=, 2012-2014
- Premium prices hiked for basic services...
- ... while lowered for more premium policies
- Green Flag is cheapest of the big 3 where it competes
Companies and Services
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- The AA
- Background
- Position in the market
- Product range
- Key data
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- Figure 31: Key financials for the Automobile Association Limited, by Group and by Roadside Assistance, 2013 and 2014
- Recent activity and promotion
- Green Flag
- Background
- Position in the market
- Product range
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- Figure 32: Green Flag breakdown cover range by type of cover, 2014
- Key data
- Recent activity and promotion
- RAC
- Background
- Position in the market
- Product range
- Key data
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- Figure 33: Key financials for RAC Finance Group (Holdings) Limited, 2012 and 2013
- Recent activity and promotion
- Other companies
- Allianz Global Assistance
- Aria Assistance
- Autonational Rescue
- AXA Assistance
- Breakdown Direct
- First Call GB
- GEM Motoring Assist
- LV=/Britannia Rescue
- Rescuemycar.com
- Start Rescue
- Retailer-branded breakdown cover
- Tesco
- Asda
- Sainsbury’s
- The Co-operative
- Car manufacturer-branded breakdown cover
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- Figure 34: Car manufacturer-branded breakdown cover on new purchases, 2014
- Roadside assistance and breakdown cover from banks
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- Figure 35: Packaged current accounts that offer breakdown cover, 2014
Brand Communication and Promotion
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- Key points
- Advertising expenditure falls back
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- Figure 36: UK main media advertising expenditure on vehicle breakdown and recovery service, 2010-13
- Summer records uplift in expenditure
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- Figure 37: UK main media advertising expenditure on vehicle breakdown and recovery services, by month, 2013
- Direct mail surges in importance
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- Figure 38: Main media advertising expenditure on vehicle breakdown and recovery services, by media type, 2010-13
- Figure 39: Main media monitored advertising expenditure on vehicle breakdown and recovery services, by % of media type, 2010-13
- Big 3 within the market also dominate advertising
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- Figure 40: Main monitored media advertising expenditure on vehicle breakdown and recovery services, by top 15 advertisers, 2010-13
Channels to Market
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- Key points
- Around half of purchasers benefit from a deal when acquiring insurance
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- Figure 41: Key channels used for purchasing breakdown recovery insurance, June 2014
- Free and discounted insurance is growing its profile
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- Figure 42: Key channels used for purchasing breakdown recovery insurance, 2011 and 2014
- Comparethemarket.com dominates price comparison market
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- Figure 43: Most popular price comparison websites, by percentage used in the last 12 months, March 2014
- Loyalty towards comparison sites is low
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- Figure 44: Number of aggregator sites used in the last 12 months, March 2014
The Consumer – Presence of Recovery Organisations
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- Key points
- Big 3 account for two thirds of market
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- Figure 45: Ownership of vehicle breakdown cover, by recovery organisation, June 2014
- Different recovery organisations popular with specific age groups
- Green Flag – a company with broad appeal
- Income a major factor in choosing the AA
- Big three strengthening their presence
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- Figure 46: Ownership of breakdown cover, by recovery organisation, 2011-14
- AA and RAC more likely to attract owners of new cars
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- Figure 47: Who do you have breakdown recovery insurance with, by vehicle ownership, June 2014
The Consumer – Key Factors When Choosing Breakdown Cover
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- Key points
- Response times and costs are key factors when choosing a company
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- Figure 48: Most important factors when choosing breakdown cover, June 2014
- Women focus on a number of key factors
- Older adults want reassurance over cost
- Urban drivers less demanding overall
- Customer demands help shape what is offered
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- Figure 49: Factors sought when choosing a breakdown recovery provider, by who do you have breakdown recovery insurance with, June 2014
- Used and nearly new owners focus on cost
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- Figure 50: Factors sought when choosing a breakdown recovery provider, by vehicle ownership, June 2014
The Consumer – Key Features Sought
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- Key points
- Drivers focus their attention on a number of key features
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- Figure 51: Most important features sought from a breakdown insurance provider, June 2014
- Women want to keep moving
- Wealthier drivers look for some specific services
- Urbanites less bothered about services
- Those looking at key features also focus on key factors
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- Figure 52: Key features sought from breakdown recovery insurance, by most popular factors sought when choosing a breakdown recovery provider, June 2014
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- Figure 53: Key features sought from breakdown recovery insurance, by next most popular factors sought when choosing a breakdown recovery provider, June 2014
- RAC members appear as the most demanding
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- Figure 54: Key features sought from breakdown recovery insurance, by who do you have breakdown recovery insurance with, June 2014
The Consumer – How Cover is Acquired
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- Key points
- Indirect purchase as part of vehicle insurance is most popular way of acquiring cover
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- Figure 55: How breakdown cover was acquired, June 2014
- Bundling with insurance attracts a number of different groups
- Different age groups purchase different ways
- Purchasing channels continue to evolve
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- Figure 56: How breakdown cover was acquired, 2011-14
- Companies have strengths with particular sales channels
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- Figure 57: How breakdown recovery insurance acquired, by who do you have breakdown recovery insurance with, June 2014
The Consumer – Switching From Your Current Provider
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- Key points
- Price is the main reason for switching
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- Figure 58: Reasons for switching from existing provider, June 2014
- Wealthier individuals are more likely to move
- Young are inclined to move for different reasons
- Rural drivers appear more loyal
- Price and service failures lead response-driven customers to move
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- Figure 59: What would make you change from your existing breakdown recovery provider, by most popular factors sought when choosing a breakdown recovery provider, June 2014
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- Figure 60: What would make you change from your existing breakdown recovery provider, by next most popular factors sought when choosing a breakdown recovery provider, June 2014
- Customer profile of major organisations impacts on reasons to move
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- Figure 61: What would make you change from your existing breakdown recovery provider, by who do you have breakdown recovery insurance with, June 2014
- Owners of used cars seem price sensitive
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- Figure 62: What would make you change from your existing breakdown recovery provider, by vehicle ownership, June 2014
The Consumer – Why Cover Is Not Held
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- Key points
- Price dominates as the main reason for not having cover
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- Figure 63: Reasons for not having breakdown cover, June 2014
Appendix – Market Environment
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- Figure 64: Forecast adult population trends, by socio-economic group, 2008-18
- Figure 65: Trends in the age structure of the UK population, 2009-19
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Appendix – The Consumer – Presence of Recovery Organisations
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- Figure 66: Most popular who do you have breakdown recovery insurance with, by demographics, June 2014
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- Figure 67: Next most popular who do you have breakdown recovery insurance with, by demographics, June 2014
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Appendix – The Consumer – Key Factors When Choosing Breakdown Cover
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- Figure 68: Most popular factors sought when choosing a breakdown recovery provider, by demographics, June 2014
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- Figure 69: Next most popular factors sought when choosing a breakdown recovery provider, by demographics, June 2014
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- Figure 70: Other factors sought when choosing a breakdown recovery provider, by demographics, June 2014
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Appendix – The Consumer – Key Features Sought
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- Figure 71: Most popular key features sought from breakdown recovery insurance, by demographics, June 2014
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- Figure 72: Next most popular key features sought from breakdown recovery insurance, by demographics, June 2014
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Appendix – The Consumer – How Cover Is Acquired
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- Figure 73: Most popular how breakdown recovery insurance acquired, by demographics, June 2014
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- Figure 74: Next most popular how breakdown recovery insurance acquired, by demographics, June 2014
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Appendix – The Consumer – Switching From Your Current Provider
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- Figure 75: Most popular what would make you change from your existing breakdown recovery provider, by demographics, June 2014
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- Figure 76: Next most popular what would make you change from your existing breakdown recovery provider, by demographics, June 2014
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