Market Developments in UK Commercial General Insurance 2007

Published by: Datamonitor

Published: Dec. 4, 2007 - 56 Pages

Table of Contents

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

Abstract

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