The car insurance industry

Since 1930, UK law has stated that every car on Britain's roads must be covered by at least third party car insurance. The fact that there are more than 32 millions cars in the country means that providing private car owners with insurance is very big business. Read about the history of insurance.

The potential for a lot of money to be made from this has not gone unnoticed and the car insurance industry is one that cannot be described as untapped. There are over a thousand active car insurance companies in the UK, each vying for motorists' attention and, more importantly, their valuable business. Read more about the UK's top five car insurance companies.

The fact that there are so many companies in the car insurance industry means that the level of competition is very high and firms are forced to keep insurance premiums to a minimum.

Cost-cutting is the name of the game when it comes to selling the most car insurance policies because drivers always want the cheapest deal. After all, what is the point of the customer buying an expensive policy with every feature under the sun if they aren't planning on ever using it? Read more about the UK car insurance industry.

There are several ways in which car insurance can be distributed, although one of the most common is via the insurance intermediary. An intermediary is usually either an agent or a broker who supplies insurance policies to customers on behalf of one or more motor insurance companies. Many of the names we associate with car insurance brands are intermediaries, including Endsleigh, Budget and Swinton. Read more about insurance intermediaries.

Another way of distributing motor insurance was founded in 1985 with the launch of Direct Line. This heralded the start of the age of direct insurers and now some of our most well-known names fit into this category: Esure, Privilege, Elephant.co.uk and Diamond, to name but a few.

The Association of British Insurers (ABI) is a body which represents the vast majority of insurance companies in the UK. It speaks out on issues related to standards in the industry, as well as campaigning for changes in the law when necessary. It has a division that is dedicated to representing car insurance companies, known as the Motor Conference. Read more about the ABI and the Motor Conference.

Although the ABI is an extremely important organisation, it is not the only one that has a big influence over the insurance industry. The Financial Services Authority (FSA) is the regulator of all financial services companies in the UK and sets the standards that every car insurance firm must meet.

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