Generation Rent is a key trend in the insurance industry, and insurers will have to be proactive in how they sell household insurance to renters. GlobalData findings show that penetration rates for all types of household insurance are much lower for renters than homeowners. In addition, a first house purchase is a key trigger for purchasing home insurance. One insurer looking to address this is Urban Jungle, a digital insurer that targets renters and younger generations with specific renters’ insurance policies.
GlobalData’s 2023 UK Insurance Consumer Survey found that 25.4% of adults in the UK live in a rental property. It also found that only 39.3% of those who rent from a private landlord had insurance in 2023. In comparison, 93.7% of respondents who own their home outright and 91.6% of homeowners with a mortgage have some form of household insurance.
Insurers could previously rely on younger generations automatically buying household insurance (and a range of life and health products) when they bought their first property. A range of macroeconomic factors—including slow wage growth, high inflation, and rising house prices—have made it increasingly hard for younger people to move onto the property ladder. GlobalData’s survey found that only 41.8% of renters intend to stop renting within the next five years. Therefore, insurers need to be more proactive in reaching this group, commonly referred to as ‘Generation Rent.’
UK startup Urban Jungle is an example of one insurer looking to do so. It offers simple policies via its app that can be paid for every month. It allows consumers to switch insurance off and on and adjust cover levels each month. This should appeal to renters on a tight budget. The insurer received further investment from the Sony Innovation Fund in April 2023, which took its overall funding to £43m ($54m). This highlights its early success and suggests it has identified a potentially fast-growing market.
Household insurers need to be more proactive and offer flexible policies if they are going to attract the growing rental population. They can no longer rely on this group automatically buying property when they move into their 30s. Due to the changing macroeconomic landscape, insurers will have to ensure they improve penetration rates among renters.
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By GlobalData
