The UK's over-50s population is growing, which means that the customer segment is a growing opportunity for insurance providers. Those over 50 are often treated and targeted as one segment. However, the over-50s market is highly diverse and should not be treated singularly. Individuals' lifestyles differ due to a number of factors such as whether they are retired, whether they still have dependent children living at home, their health, and their financial freedom. Acknowledging this should encourage a move away from targeting a homogenous over 50s segment towards focusing on the different lifestages associated with growing older. This is important because differences in lifestyle mean that the insurance needs of individuals also differ. Insurance providers must acknowledge and use this to develop their products and services to make them more relevant to consumers.
16.5% of over-50s have a child under 18 and are likely to have buying habits in line with the mass market. Meanwhile 28.9% of parents over 50 have an adult child still living at home and are more likely to need a multi-car policy and extra possessions cover.
57.0% of the over-50s UK population is economically inactive, which is driven by those aged over 65. These individuals are more likely to go on holiday and require travel insurance.
35.6% of the over-50s UK population has a disability. These customers need more support and may engage online if they are unable to leave home. They are ripe for an online community.
This report explores the over-50s demographic and segments the age group into five distinct lifestages, from those with dependent children in education, to those over 70 who are declining in health. The insurance needs, values, purchasing preferences, and behavior of each lifestage are highlighted and discussed based on these findings, along with the opportunities each lifestage provides insurers and how best to target them. It discusses the main competitors within the over-50s segment and analyzes their approach to targeting customers.
Reasons to Buy
To get a better understanding of the diversity of lifestyles of customers within the over-50s segment.
To understand the differing values, behavior, and insurance needs of customers aged over 50.
To improve customer engagement by recognizing what is most important to over-50s customers based on their lifestage and how insurers can adapt their products and services to meet their needs.
Understand how the over-50s segment should be approach with regards to marketing and advertising.
To discover the top providers within the over-50s market.
1.1. Diversity within the over-50s segment needs to be acknowledged
1.2. Key findings
1.3. Critical success factors
2 THE OVER-50S SEGMENT IN THE UK
2.2. The UK's over-50s population is a growing opportunity for insurers
2.2.1. The over-50s form an increasing share of the UK adult population
2.2.2. The over-50s group will continue to grow towards 2025 but the age structure will change
2.2.3. Adults are living longer and in better health
2.2.4. The over-50s make up two thirds of the disabled population in the UK
2.2.5. The over-50s market is skewed towards women due to their longer life expectancy
2.2.6. Most over-50s are married, but there is a shift towards becoming widowed with age
2.2.7. One in five adults aged over 45 lives alone
2.2.8. The over-50s may still have dependents as a result of having children later in life
2.2.9. The majority of over-50s have adult children aged over 19
2.2.10. Almost 70% of UK household wealth is held by the over-50s
2.2.11. Most over-65s are economically inactive, whereas 50-64s are generally still in employment
2.2.12. Outright home ownership increases with age as mortgages are paid off over time
2.3.1. The diversity within the over-50s market needs to be acknowledged
2.3.2. The lifestyle of an individual is a combined outcome of three factors
2.3.3. Sizing lifestage segments within the over-50s population
2.3.4. Societal changes mean that the age ranges with which lifestages are associated are shifting
3 INSURANCE NEEDS, VALUES, AND PURCHASING PREFERENCES
3.1. Individuals have different insurance needs based on their lifestyle
3.1.1. Over-50s with dependent children still in education are the most risk-averse
3.1.2. Although fewer individuals travel with age, those who do travel do so more frequently
3.1.3. The dominance of single-trip cover falls with increasing age
3.1.4. 78.2% of over-50s who rent out a second property in the UK have landlord insurance
3.1.5. Few over-50s identify as having a mass affluent or high net worth lifestyle
3.2. The purchasing preferences of individuals vary by age and lifestyle
3.2.1. Over-50s consumers move away from price comparison sites towards brokers with age
3.2.2. The preference to purchase online falls with age, while purchasing over the phone rises
3.2.3. Price comparison sites are the main research tool before buying a policy
3.2.4. Internet use among the over-50s is increasing over time
3.2.5. Insurance providers must optimize their websites and services for tablets and mobiles
3.2.6. Provider loyalty does not change with age-the majority still shop around at renewal
3.2.7. Price is most important to customers when purchasing insurance
3.2.8. Insurance providers should engage with over-50s customers through social media
4 TARGETING OVER-50S WITH GENERAL INSURANCE
4.1. The key to successful targeting is to understand the customer
4.1.1. There are three elements that need to be aligned to target a consumer group
4.1.2. Individuals over-50 with dependent children still identify with the mass market
4.1.3. A subtle marketing approach is needed for individuals approaching retirement and with adult children at home
4.1.4. Early retirees will begin to identify with over-50s brands, but not obviously labeled "over-50s" products
4.1.5. Late retirees begin to identify with being labeled as over-50s customers
4.1.6. Declining health and independence should not dominate the identity of an individual
5 A RANGE OF INSURANCE PROVIDERS TARGET THE OVER-50S
5.1.1. There are many approaches insurance providers take to target the over-50s market
5.1.2. Saga's insurance offering exclusively targets the over-50s segment
5.1.3. RIAS subtly markets to older customers without labeling them as the "over-50s"
5.1.4. Ageas is reliant on its brand RIAS and its partnership with Age UK in targeting the over-50s
5.1.5. Post Office Money has over-50s products for home, motor, life, and travel insurance
5.1.6. LV= serves the over-50s segment less obviously by tailoring its standard products
5.1.7. Co-op Insurance does not specifically target over-50s for insurance but is expected to have an older customer base
5.2. The popularity of over-50s providers and products increases with customer age
5.2.1. The transition to over-50s products does not happen overnight
5.2.2. Providers only targeting those over-50 are able to offer more competitive premiums
5.2.3. LV= and Saga are the top providers of motor insurance for the over-50s
5.2.4. Aviva and Direct Line are the top providers of home insurance for the over-50s
5.2.5. Nationwide and Lloyds Bank are the leading travel insurers for the over-50s
5.2.6. Petplan and Animal Friends are the top providers of pet insurance for the over-50s
6 MARKETING STRATEGIES SHOULD FOCUS ON LIFESTAGE
6.1.1. Moving away from the "over-50s" label
6.1.2. Marketing strategies should represent older customers positively
6.1.3. Older customers have the greatest spending power and should be a focus for advertising
6.1.4. LV= and Saga have the highest advertising spend for the over-50s market
6.1.5. Over-50s brands focus their marketing strategies on car and home insurance
6.1.6. Direct mail is the main advertising strategy used by over-50s providers
7.1.1. Banks/building societies
7.2.1. Primary and secondary research
7.2.2. GlobalData's UK General Insurance Consumer Survey
7.4. Further reading
Figure 1: 47.6% of the UK adult population will be aged 50 or above by 2025
Figure 2: The UK population is living longer and in better health
Figure 3: 35.6% of over-50s have a disability, with the greatest proportion being over the age of 80
Figure 4: The over-50s market, especially those over 70, is skewed towards women
Figure 5: With increasing age, there is a shift from being married to being widowed in the over-50s segment
Figure 6: 48.0% of females aged over 75 in the UK live alone
Figure 7: Women are deciding to have children later in life
Figure 8: 6.6% of young adults aged 15-34 lived with their parents in 2015
Figure 9: 94.0% of adults over 50 have children, the majority of whom are aged over 19
Figure 10: The proportion of over-50s with children under 18 falls with age
Figure 11: There is a clear shift from employment to retirement after 65
Figure 12: The majority of over-65s own their homes outright without a mortgage
Figure 13: Lifestages of the over-50s
Figure 14: The declining health segment accounts for over a third of the over-50s population
Figure 15: There is a clear correlation between lifestage and age band within the over-50s
Figure 16: The need for insurance products varies with age and lifestyle
Figure 17: Over-50s in a family with dependents in education are more risk-averse
Figure 18: 45.5% of over 70s did not travel abroad in the last 12 months
Figure 19: Early retirees are the over-50s segment who travel most frequently
Figure 2021: Cover provided through a bank account package becomes more popular with age
Figure 22: Early retirees have the highest preference for annual policies
Figure 23: The direct channel is the preferred purchasing channel across all over-50s age bands
Figure 24: Early retirees have more time to shop around on price comparison sites
Figure 25: With age customers move away from the internet and towards purchasing over the phone
Figure 26: Early retirees prefer to shop online due to their affinity for aggregators
Figure 27: 50-54s research the most before they buy, making them the most informed consumers
Figure 28: Early retirees are the highest users of price comparison sites to research before buying
Figure 29: Internet use has risen the most among individuals over 65 since 2011
Figure 30: Desktop computers have fallen in popularity with the rise of smartphones and tablets
Figure 31: Switching activity does not change with increasing age
Figure 32: There is no change in customer loyalty to provider by lifestage
Figure 33: Price is the most influential factor in policy selection across all age bands
Figure 34: Early retirees are the most sensitive to price among all over-50s lifestages
Figure 35: Customers are either highly engaged with social media platforms or not at all
Figure 36: Early retirees are the most frequent users of social media platforms
Figure 37: Saga offers a range of over-50s insurance products
Figure 38: RIAS offers a range of insurance products
Figure 39: Age UK provides a range of insurance products designed for the over-50s
Figure 40: Post Office Money offers specialist over-50s products
Figure 41: LV= insures over-50s customers within its standard products
Figure 42: The market shares of LV= and Saga increase with customer age for motor insurance
Figure 43: Saga is only a top five provider for customers aged over 65
Figure 44: Banks and specialist over-50s insurers dominate travel insurance
Figure 45: Preference for pet insurance provider does not change greatly by customer age
Figure 46: �26.5m was spent on advertising for the over-50s in H1 2016
Figure 47: Advertising for over-50s focuses on home and motor insurance
Figure 48: Direct mail campaigns are the preferred advertising medium of over-50s providers
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