Direct writers are still winning market share from brokers in the motor and household markets – although buying behaviour is beginning to stabilise.

This is the key finding of Swiss Re's sixth non-life Insurance Report, published this week.

Report writer Paul Martin at Swiss Re said: “Brokers are over the worst as direct writers are beginning to plateau. There remains a solid core of people who prefer dealing with a physical high street presence.”

He stressed this is not restricted to older people, but also younger motorists looking for a good deal.

There is more cheer from the finding that the number of people with no insurance cover has dropped from 16% in 1995 to 6% in 2000. And more than 60% of respondents report they are very happy with the way their insurance claims have been handled. “Insurers would appear to be getting the basics right,” said Martin.

However, he warned all types of insurers against complacency.

Martin said the increasing number of mergers and acquisitions was diluting the strength of brand loyalty to insurers, as well-known names such as CGU disappear.

The internet's arrival as a distribution tool is adding confusing signals to the market, although awareness of the availability of insurance on the net remains low, said Martin. Only 2% of people have bought a policy online, the report reveals.

Martin commented: “This is minuscule when you think about how much hype there has been.”

Reasons for not purchasing insurance online include concerns over credit card security and reluctance to provide personal details over the web.

Direct debit arrangements are the favoured way of paying for insurance for more than 55% of motor insurance and 65% of household policies.

This automatic payment arrangement has also made it less likely that people will shop around for insurance.

In 2000, 60% of motor policyholders renewed their business. This is even more true for household insurance, where almost 80% stayed with their existing insurer on renewal.

The report showed people would be more inclined to buy insurance from “plain speaking” brands such as Virgin, Marks & Spencer and Tesco.

Martin suggests that insurers bridge this awareness gap by increasingly marketing themselves to affinity groups, such as sporting clubs and charity groups.

The report reveals that 47% of those surveyed belong to some sort of association or group, making this a huge potential market.