UK Commercial General Insurance 2009
Datamonitor
November 9, 2009 SKU: DFMN2500494
|
|
Countries covered: United Kingdom
Introduction
This unique report provides an unrivalled analysis of the UK general insurance market with a specific focus on the commercial lines sector. It segments the market by line of business and assesses underwriting profits and investment income. The research also includes an in-depth analysis of the distribution and competitive landscape and forecasts the commercial lines market size to 2013.
Scope- Data on the size, structure and profitability of the total non-life market and the commercial lines sector.
- Analysis of the total premiums and market share for the largest commercial lines insurance groups.
- A discussion of the main factors affecting the general insurance market in the future along with forecasts of market size to 2013.
Highlights
Perhaps the most striking feature of the market, based on our analysis of the 2008 FSA Returns, is the sharp deterioration in the combined ratio in commercial lines. Pure year combined ratios increased across the board in recent years including commercial property, motor, liability and commercial pecuniary loss lines.
One of the main developments that Datamonitor expects to see in the 2009 FSA Returns, when they become available next year, is a significant re-shaping of the commercial books of some of the leading commercial insurance groups. The H1 2009 results point to several large insurance groups reducing their capacity for commercial lines business.
Reasons to Purchase- Understand the segmentation of the UK general insurance market and the differing profitability by class of business.
- Benchmark your premium income against that of your competitors and understand the drivers of growth in their businesses.
- Gain insight into the future development of the market in terms of competitors, major issues and market size.
|
- Overview
- Catalyst
- Summary
- Executive Summary
- Commercial lines is running a high pure year COR
- The industry trading result held up well
- Commercial is running a high pure year COR
- 2009 will see a dip in the industry trading result and some changes to groups' commercial books
- The rate of market growth will increase over the next five years as the market hardens
- Table of Contents
- Table of figures
- Table of tables
- Market context
- Introduction
- Conditions are deteriorating for insurers
- The market contracted in 2008 as insurers continued to compete hard
- Insurers pulled capacity from suretyship insurance
- Motor and property insurance continue to dominate the UK non-life insurance market
- Lloyd's of London underwrites around £2 billion of UK insurance
- Motor, liability, property and pecuniary loss have driven the COR up in recent years
- Pecuniary loss is a strong source of underwriting profit
- Insurers are being hit by falling investment income
- A drop in investment income put additional pressure on insurers' margins in 2008
- Insurers saw an estimated trading result of 9% of NWP in 2008
- Reserve releases are propping up reported profits
- Insurers propped up their reported underwriting results with around £1 billion in reserve releases
- Insurers made significant reserve releases in motor and property insurance while strengthening reserves for liability insurance
- The soft market has hit home in commercial lines
- Growth in commercial lines remains subdued by strong competition
- The commercial market is growing slowly
- Commercial lines is running a high COR, net of reserve releases
- ABI data show a commercial lines profit, after allowing for reserve releases
- Distribution
- Introduction
- National brokers increased their share of the commercial insurance market in 2008
- National brokers saw a significant increase in market share as other brokers saw their market share contract
- The direct channel experienced a small decline in market share in 2008
- Partnerships with affinities have only generated a small proportion of commercial insurance GWP
- Commercial insurance GWP distributed through banks and building societies remains negligible
- Less traditional forms of arrangement are more common among smaller SMEs
- Brokers dominate among all sizes of SMEs, though they have greater market share among larger SMEs
- Face-to-face arrangement is popular in the market but is more prevalent among larger SMEs
- Price is the key factor behind SME insurance purchasing decisions
- SMEs are sensitive to price, regardless of their size
- SMEs that purchase online appear to be the most price sensitive
- High levels of retention go along with high levels of satisfaction
- SMEs are generally happy with their insurance provider
- SMEs tend to prefer longstanding relationships with their providers, making an initial pitch critical
- A large proportion of SMEs are unlikely to switch to a new provider
- More SMEs considered a change of provider in 2009 than in 2008
- A variety of companies, from different industries, believe they will change their provider over the next year
- SMEs that use the internet to arrange their insurance are the most likely to search out a new provider
- Of those SMEs willing to buy insurance online or via the telephone, liability products were the most popular
- Competitive Dynamics
- Introduction
- Aviva remains the market leader
- Aviva remained the clear leader in the UK commercial insurance market in 2008 with a 13.1% market share
- RSA, Zurich, AXA and Allianz occupy positions two to five
- RSA has adopted a strategy of selective capacity withdrawal and premium rate increases
- Zurich remained the third largest UK commercial insurer in 2008 with a market share of 9.8%
- AXA remained one of the larger top 10 commercial players in 2008, with a market share of 6.9%
- Allianz maintained its market share of 7.1% in 2008
- AIG was the 6th largest commercial insurance group
- NFU Mutual and QBE gained share
- NFU bucked the trend, reporting a 3.3% increase in its commercial lines business GWP in 2008
- QBE grew its commercial lines business by 8.5% to £416.1m
- RBS's 2.8% market share was largely due to its sizable presence in the commercial property insurance market
- ACE's 2.4% market share made it the tenth largest commercial insurer in the UK market
- Future Decoded
- Introduction
- The industry trading result will be challenging in 2009
- The 2009 results will show some significant re-shaping of players' books
- Profits are expected to dip in 2009
- Investment returns will fall
- Reserve releases are expected to continue in 2009
- Profits are likely to be impacted by a sharp rise in the pecuniary loss COR in 2009 and 2010
- Commercial lines is forecast to grow to £18 billion by 2013
- Adverse economic conditions will trim growth across the market early in the forecast
- The liability insurance market will see growth close to the market compound average
- Premium rate inflation will drive growth in the commercial motor insurance market
- Commercial property insurance GWP will experience the fastest growth of all commercial insurance lines
- Economic recovery and premium rate growth will increase commercial pecuniary loss GWP
- An improvement in the economy and premium rates will result in higher liability insurance premium income
- Premium rates will drive liability GWP growth, though higher turnover and headcount will generate growth as well
- The liability market will reach a value of £7.6 billion in 2013 under expected conditions
- Growth in commercial motor insurance GWP will mainly come from higher premium rates
- Premium rate increases will be the primary factor driving growth in the commercial motor insurance market
- The UK commercial motor insurance market is forecast to reach a value of £3.8 billion in 2013
- Commercial property premium income growth will be stronger in the early years of the forecast
- The market will grow slowly in 2009 and harden significantly thereafter
- The commercial property market is predicted to be worth £5.9 billion by 2013
- Commercial pecuniary loss GWP is expected to grow, but not regain recent highs
- Premium income is expected to remain below £1 billion, despite continual growth
- APPENDIX
- Definitions
- ABI members
- Accident year combined ratio
- Bancassurers
- Brokers
- Brandassurers
- Channel
- Direct insurer/writer
- Earned premiums
- Gross premium
- Net premium
- Platform
- Reported year combined ratio
- Reserve development
- Suretyship insurance
- Written premiums
- Additional data
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- Overview
- Table 1: Annual growth in general insurance market, 2000-08 (%)
- Table 2: GWP by line of business, 2000-08 (£m)
- Table 3: UK insurance market split by ABI members and Lloyd's of London, 2008 (£m)
- Table 4: Total market combined ratio, 2004-08 (%)
- Table 5: Accident year CORs by line of business, 2004-08 (%)
- Table 6: Underwriting result by line of business, 1998-2008 (£m)
- Table 7: Underwriting result, investment income and trading result as a percentage of NWP (worldwide business of UK insurers), 2000-08
- Table 8: Underwriting result, investment income and trading result as a percentage of NWP (UK business), 2000-08
- Table 9: Commercial insurance GWP by line of business, 2005-08 (£m)
- Table 10: Accident year COR, commercial lines, 2005-08 (%)
- Table 11: Underwriting result, commercial lines, 1998-2008 (£m)
- Table 12: Market share of the distribution channels in the commercial general market, 1999-2008 (%)
- Table 13: Q: "What were the most important reasons for choosing your commercial insurance provider?"
- Table 14: Q: "How long have you been with your current insurance provider?"
- Table 15: Q: "Do you think you will change your commercial insurance provider in the next 12 months?"
- Table 16: Top 10 UK commercial general insurance groups by market share and GWP, 2005-08
- Table 17: Forecast commercial general insurance GWP, 1997-2013f
- Table 18: Key variables affecting commercial liability insurance GWP, 2009f-13f
- Table 19: Forecast of UK commercial liability insurance GWP, 2005-13f (£m)
- Table 20: Key variables affecting commercial motor insurance GWP, 2009f-13f
- Table 21: Forecast of UK commercial motor insurance GWP, 2009-13f (£m)
- Table 22: Key variables affecting GWP, 2009f-13f
- Table 23: Forecast of UK commercial property insurance premium income, 2005-13f (£m)
- Table 24: Forecast of UK commercial pecuniary loss insurance premium income, 2005-13f (£m)
- Table 25: Total UK pecuniary loss underwriting account, 1998-2008
- Table 26: Total UK property underwriting account, 1998-2008
- Table 27: Total UK household underwriting account, 1998-2008
- Table 28: Total UK commercial property underwriting account, 1998-2008
- Table 29: Total UK motor underwriting account, 1998-2008
- Table 30: Total UK personal motor underwriting account, 1998-2008
- Table 31: UK commercial motor underwriting account, 1998-2008
- Table 32: UK liability underwriting account, 1998-2008
- Table 33: UK accident & health underwriting account, 1998-2008
- List of Figures
- Figure 1: The industry has experienced slow or negative growth in recent years due to strong competition
- Figure 2: Increases in the liability and property sectors were offset by falls in motor, A&H and pecuniary loss
- Figure 3: Motor and property continue to be the two largest lines of business
- Figure 4: Lloyd's of London underwrites around 5% of the UK insurance market
- Figure 5: The combined ratio for the total market bottomed out in the years 2004-06 but it has increased to 108% in 2008
- Figure 6: Motor, liability, property and pecuniary loss have seen increasing CORs
- Figure 7: Pecuniary loss and A&H are a steady source of profits
- Figure 8: Investment income as a percentage of premiums fell to an all time low in 2008 due to the financial crisis
- Figure 9: The trading result for UK business fell in 2008 however it was broadly in line with the across-the-cycle trading result
- Figure 10: Insurers have bolstered reported profits with massive reserve releases in the years 2005-08
- Figure 11: Insurers made significant reserve releases in motor and property insurance while strengthening reserves for liability
- Figure 12: Slow premium growth has led to deterioration in the commercial lines COR
- Figure 13: General liability is the largest line of commercial insurance
- Figure 14: Commercial lines combined ratios have increased across the board
- Figure 15: Commercial lines underwriting peaked in 2004-6 and has now started deteriorating
- Figure 16: National brokers witnessed a significant increase of their share in the UK commercial insurance market in 2008
- Figure 17: Brokers have the highest penetration among medium-sized firms
- Figure 18: Micro SMEs are most comfortable with arranging their cover over the telephone
- Figure 19: Price was almost matched in importance by service as a criteria for selecting a provider
- Figure 20: Internet clients are the most price-sensitive
- Figure 21: Satisfaction levels in the market remain high
- Figure 22: Very few SMEs have changed their provider in the last two years
- Figure 23: Companies in the education sector are the most likely to seek out a new quote in the next 12 months
- Figure 24: Clients which arrange their insurance through the internet are the most likely to search for another provider
- Figure 25: SMEs show the greatest willingness to purchase public and employers' liability insurance online
- Figure 26: QBE and NFU Mutual increased market share in 2008
- Figure 27: Insurers are likely to see a sharp rise in the pecuniary loss COR judging from the effects of the last recession in 1990
- Figure 28: Commercial insurance GWP is forecast to grow throughout the forecast period as the market hardens
- Figure 29: Liability GWP is expected to fall in 2009 and return to growth thereafter
- Figure 30: Premium rates are expected to drive commercial motor insurance growth in 2009 and 2010
- Figure 31: Commercial property is set to harden in order to bring the COR down
- Figure 32: The commercial pecuniary loss market is forecast to grow again, though at a lower rate
More United Kingdom General Insurance Reports
Channel Metrics: Consumer Distribution Trends in UK Household Insurance (briefing) by
Finaccord Ltd.
Channel Metrics: Consumer Distribution Trends in UK Household Insurance is the most detailed and up-to-date guide to distribution trends in household insurance in the UK ...
2012: Trends to watch in insurance by
Datamonitor
This report provides a detailed analysis of trends which will impact the UK general insurance industry in 2012. This report covers the effects that these ...
General Insurance in the UK - Industry Market Research Report by
IBISWorld
General Insurance in the UK Businesses in this industry underwrite insurance policies relating to property, casualty, liability and other general risks. In underwriting insurance policies, general ...
Claims Management in UK General Insurance 2011 by
Datamonitor
This report analyzes UK motor, property and liability claims in terms of costs, frequency and competitor efficiency ratios. It also includes forecasts for up to ...
A Comprehensive Study Of The UK Insurance Companies & Agents Market In 2010, Rating & Valuing Each Of The 1000 Companies That Operate In Today's Market by
Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...
See all reports like this >>
More United Kingdom Reports
A Comprehensive Study Of The UK Video Conferencing Equipment Market In 2010, Rating & Valuing Each Of The 30 Companies That Operate In Today's Market by
Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...
A Comprehensive Study Of The UK Tableware Market In 2010, Rating & Valuing Each Of The 166 Companies That Operate In Today's Market by
Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...
A Comprehensive Study Of The UK Surveyors & Valuers Market In 2010, Rating & Valuing Each Of The 943 Companies That Operate In Today's Market by
Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...
A Comprehensive Study Of The UK Subsea Engineering Market In 2010, Rating & Valuing Each Of The 142 Companies That Operate In Today's Market by
Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...
A Comprehensive Study Of The UK Structural Engineering Consultancy Market In 2010, Rating & Valuing Each Of The 300 Companies That Operate In Today's Market by
Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...
See all reports like this >>
Share this report
Other tasks Related Markets General Insurance Reports Free Alert Me service Receive bi-weekly email alerts on new market research Sign Up Today!
|
