Market Developments in UK Commercial General Insurance 2007
Datamonitor
December 4, 2007 56 Pages - SKU: DFMN1640455
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Countries covered: United Kingdom
Introduction
This brief analyzes the performance of the major commercial general insurance lines - liability, commercial motor, commercial property, group accident and health and commercial pecuniary loss. It provides insight into GWP growth and underwriting profitability.
Scope
Data on GWP growth in the key sectors of the commercial insurance market Information on the underwriting profitability of UK commercial insurance markets information on the position of the Lloyd's insurance market for each of the main classes of business
Highlights
The UK commercial general insurance market recorded a 3.2% decline in GWP in 2006. This reflected decreases in premium income from the general liability, commercial property, commercial motor and commercial pecuniary loss sectors. UK commercial liability GWP declined by 6.3% in 2006 to £5.8 billion. The primary driver behind the liability market’s contraction in 2006 was falling premium rates as the number of insurable businesses does not increase significantly year to year. Premium income in the commercial motor insurance market declined by 1% in 2006. Falling premium rates due to insurers pricing for market share are the primary driver behind this contraction in GWP, although a slowing of the rate of increase in commercial vehicle numbers has also magnified the effect this has had on premium income.
Reasons to Purchase
Gain access to clear and concise research on the commercial general insurance market Understand changes in GWP growth across the market, as well as the driving factors behind them Develop your business plans based on sound analysis of current trends
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- DATAMONITOR VIEW
- CATALYST
- SUMMARY
- ANALYSIS
- Introduction
- Total general insurance GWP declined in 2006
- The motor insurance market recorded its fourth consecutive year of decline
- Property insurance GWP rose very slightly in 2006
- General liability recorded a significant fall in GWP
- Accident and health was the only business line to record strong growth
- Pecuniary loss GWP fell by 3.2%
- The general liability, commercial property, commercial motor and pecuniary loss markets recorded a fall in GWP in 2006
- The total general insurance market moved further into profit in 2006
- The accident and health market performed well in 2006, with growth in GWP and strong growth in underwriting profit
- Individual and group accident and health GWP grew in 2006
- During 2006, individual health GWP growth slowed and premium income fell in the individual accident sector
- The group health sector recorded GWP growth of 3.2% in 2006
- The accident and health market witnessed underwriting profits grow substantially in 2006
- Lloyd's and other non-company market players increased their share of the accident and health insurance market in 2006
- The total general liability market contracted in 2006, but it moved into an underwriting profit
- Competitive conditions in the liability market resulted in lower premium income
- The liability underwriting result improved for a fifth consecutive year in 2006, and the market finally achieved profitability
- The company market increased its exposure to the liability insurance market in 2006 compared to Lloyd's
- The motor insurance market softened in 2006 however underwriting profits in the commercial sector improved
- Both private and commercial motor markets contributed to the decline in motor premium income in 2006
- Commercial motor insurance premium income declined in 2006, due to the soft market
- Underwriting losses grew in the motor market in 2006 as private motor losses exceeded profits in the commercial motor market
- The commercial motor underwriting result increased in 2006
- Lloyd's insurers saw their exposure to motor insurance decrease in 2006
- Total pecuniary loss GWP fell in 2006 with decreases in the personal and commercial sector, however underwriting profits increased
- The pecuniary loss market declined by an estimated 3.2% in 2006
- Pecuniary loss continues to be a profitable line of business, with profits increasing to £691m in 2006
- Lloyd's and other non-company market players increased their exposure to pecuniary loss insurance in 2006
- Property GWP fell in 2006, led by the soft commercial property sector where underwriting profits dropped
- Household insurance GWP increased in 2006, while commercial property GWP fell
- Property underwriting profits continued to decline during 2006 but the market remains profitable
- The commercial property underwriting result decreased in 2006 for a second consecutive year
- ABI members underwrote the vast majority of property insurance in 2006
- APPENDIX
- 2005-6 definitions for lines of business
- Accident & health
- Medical expenses
- HealthCare cash plan
- Travel
- Personal accident or sickness
- Motor
- Total private motor
- Total commercial motor
- Private motor comprehensive
- Private motor non-comprehensive
- Motorcycle
- Fleets
- Commercial vehicles (non-fleet)
- Property
- Total commercial property
- Household and domestic all risks.
- Consequential loss (i.e. business interruption)
- Financial/Pecuniary loss business
- Total personal financial loss business
- Total commercial financial loss business
- Legal expenses
- Fidelity and contract guarantee
- Liability business
- Employers liability (including the employers liability part of mixed liability packages but excluding mixed commercial packages)
- Professional indemnity (including directors' and officers' liability and errors and omissions liability)
- Public and products liability
- Mixed commercial package
- Total personal
- Total commercial
- Pre-2005 definitions for lines of business
- Accident and health
- Individual accident and health
- Group accident and health
- General liability
- Motor
- Pecuniary loss
- Total pecuniary loss figures
- Property
- Premium income measures
- Earned premiums
- Gross Premium
- Net Premium
- Written premiums
- 2005 FSA Return changes
- Major changes in FSA Return categories and their impact
- Market size
- Changes in market size information
- Market size methodology
- Lloyd's players and underwriting result figures
- Competitor data
- GWP versus GEP reporting
- Total personal and total commercial business
- Home-Foreign, overseas and facultative reinsurance business
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Total general insurance GWP by line of business, 2002-6
- Table 2: Commercial general insurance market GWP and year-on-year growth, split by sector 2002-6
- Table 3: Total general insurance underwriting result, by line of business, 1996-2006
- Table 4: Accident & health GWP split between individual and group, 2002-6
- Table 5: Accident and health GWP by sector, 2002-6
- Table 6: Total accident & health underwriting result, 1996-2006
- Table 7: Accident and health GWP split between ABI members and Lloyd's/Other, 1996-2006
- Table 8: UK commercial liability market, 2002-06 (£m)
- Table 9: Total general liability underwriting result, 1996-2006
- Table 10: Liability GWP split between ABI members and Lloyd's/Other, 1996-2006
- Table 11: Total motor market GWP by private and commercial segment, 2002-6
- Table 12: Commercial motor GWP, by line of business, 2002-6
- Table 13: Total motor underwriting account, 1996-2006
- Table 14: Commercial motor underwriting result, 1996-2006
- Table 15: Motor GWP split between ABI members and Lloyd's/other, 1996-2006
- Table 16: Pecuniary loss market GWP by line of business, 2002-6
- Table 17: Total pecuniary loss underwriting account, 1996-2006
- Table 18: Pecuniary loss GWP split between ABI members and Lloyd's/Other, 1996-2006
- Table 19: Property insurance GWP split between household and commercial business, 2002-6
- Table 20: Total property underwriting account, 1996-2006
- Table 21: Commercial property underwriting result, 1996-2006
- Table 22: Property GWP split between ABI members and Lloyd's/other, 1996-2006
- List of Figures
- Figure 1: General insurance GWP declined in 2006
- Figure 2: The general liability, commercial property and commercial motor markets recorded a fall in GWP in 2006
- Figure 3: The total general insurance market moved further into profit in 2006
- Figure 4: Growth in the individual accident and health sector slowed in 2005 and 2006
- Figure 5: During 2006, individual health GWP growth slowed and premium income fell in the individual accident sector
- Figure 6: Growth in profitability returned to the accident and health market in 2006
- Figure 7: Lloyd's and other non-company market players increased their share of the UK accident and health insurance market in 2006
- Figure 8: Falling premium rates in most liability lines meant lower GWP across the liability market
- Figure 9: The total general liability underwriting result increased in 2006
- Figure 10: The company market, Lloyd's and other non-company market players all saw liability insurance GWP decline in 2006
- Figure 11: Both the private and commercial motor markets declined in 2006
- Figure 12: The decline in commercial motor income was the result of reductions in both fleet and commercial vehicle insurance
- Figure 13: The motor insurance market continued to make an underwriting loss in 2006
- Figure 14: The commercial motor underwriting result increased in 2006
- Figure 15: Lloyd's insurers saw their exposure to motor insurance decrease in 2006
- Figure 16: The pecuniary loss market saw its underwriting profit increase in 2006
- Figure 17: Lloyd's and other non-company market players increased their exposure to pecuniary loss insurance in 2006
- Figure 18: Household insurance GWP increased in 2006, while commercial property GWP fell
- Figure 19: Property insurance underwriting profits fell in 2006 to £517m
- Figure 20: The commercial property underwriting result decreased in 2006
- Figure 21: The company market underwrote the vast majority of property insurance in 2006
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