Performance Ratio Benchmarking of the Top UK General Insurers 2007

Published by: Datamonitor

Published: Dec. 19, 2007 - 54 Pages

Table of Contents

Overview

Catalyst

Summary

Table of Contents

Table of figures

Table of tables

Performance ratio benchmarking in UK accident & health insurance

The profitability of the top 10 accident and health insurers deteriorated in 2006 due to increases in loss ratios

The top 10 accident and health insurers recorded an average loss ratio of 63.7% in 2006, with the majority seeing an increase in their loss ratio

The average loss ratio of 63.7% in 2006 was a 3.5 percentage point increase from 2005

Standard Life combined a growing book of business with a smaller loss ratio

Combined Insurance Company of America was the only top 10 accident and health insurer to see a loss ratio reduction other than Standard Life

Five insurers saw loss ratios increase at the same time as their books grew

New Hampshire and BUPA saw loss ratios increase while their books declined in size

The top 10 accident and health insurers recorded an average expense ratio of 29.9% in 2006

Three of the top 10 accident and health insurers saw their expense ratios decrease while their books grew

Combined Insurance Company of America saw its book shrink and its expense ratios reduce

Norwich Union, SimplyHealth and AXA saw expense ratios increase as their books expanded

Two insurers saw their expense ratios increase alongside a shrinking book of business

The top 10 accident and health insurers recorded an average combined ratio of 93.6% in 2006, although two of the biggest players saw their ratios move above 100%

The top 10 accident and health insurers achieved an average combined ratio of 93.6% in 2006

Groupama and Standard Life both saw their combined ratios decrease in 2006 and their books grow, but Groupama's ratio remained above 100%

Combined Insurance Company of America's loss ratio fell by 5.8 percentage points

Six of the top 10 insurers saw their combined ratios increase in 2006

Performance Ratio Benchmarking in UK liability insurance

The performance of the top 10 liability insurers was mixed in 2006 with some seeing better profits while a few players recorded significant losses

The average loss ratio of the top 10 UK liability insurers rose by 9.7 percentage points in 2006, but Norwich Union and QBE recorded large reductions

The average loss ratio for the top 10 liability insurers rose by 9.7 percentage points in 2006

Norwich Union and QBE saw the largest improvements in their loss ratios

Zurich saw the largest deterioration in its loss ratio in 2006

The average expense ratio of the top 10 liability insurers increased by 3.2 percentage points in 2006, with New Hampshire recording the largest increase

The average expense ratio rose by 3.2 percentage points in 2006 to 30.5%

New Hampshire recorded the largest increase in its expense ratio but remained one of the most efficient players

Royal & SunAlliance, AXA and Allianz were the least efficient UK liability insurers in 2006

The average combined ratio of the top 10 UK liability insurers increased in 2006, with Zurich and AXA seeing the two biggest increases

The average combined ratio increased in 2006 by 12.9 percentage points to 102.1%

Norwich Union and QBE bucked the trend and recorded improvements in their loss ratios

Six of the top 10 UK liability insurers recorded combined ratios below 100% in 2006

Four insurers recorded combined ratios in excess of 100% in 2006

Performance ratio benchmarking in UK motor insurance

The top 10 motor insurers made the move into profitability in 2006 on the back of reductions in losses and expenses

The average loss ratio among the top 10 UK motor insurance providers declined in 2006 with AXA, Norwich Union and Churchill recording the biggest improvements

In 2006, the average loss ratio of the top 10 UK motor insurers fell by 3.3 percentage points to 71.1%

AXA, Norwich Union and Churchill recorded the strongest loss ratio reductions

Four insurers recorded loss ratio deterioration

The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006, with Churchill, AXA, NIG and Royal & SunAlliance recording above-average reductions

The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006

Churchill, AXA, NIG and Royal & SunAlliance recorded above-average expense ratio decline

Norwich Union, Zurich and NFU Mutual recorded the highest increases in their expense ratios

The average combined ratio of the top 10 motor insurers fell by four percentage points in 2006, with AXA and Churchill seeing significant declines

The average combined ratio of the top 10 motor insurers declined by four percentage points in 2006

AXA and Churchill recorded significant reductions in combined ratio in 2006

NIG, Direct Line and Zurich recorded combined ratio increases

Performance ratio benchmarking in UK pecuniary loss insurance

The top 10 pecuniary loss insurers saw their profitability increase

Pecuniary loss combined ratios increased as expense ratios rose and loss ratios fell

The average loss ratio of the top 10 pecuniary loss insurers declined by 0.2 percentage points to 29.4% in 2006

Norwich Union and Lloyds TSB achieved strong loss ratio reductions

Direct Line and Pinnacle recorded the highest loss ratio increases

The average expense ratio of the top 10 pecuniary loss insurers increased to 65.3% in 2006, with Direct Line, Allianz and St Andrew's seeing the highest individual increases

The average expense ratio of the top 10 pecuniary loss insurers increased by 1.8 percentage points to 65.3% in 2006

GEFI, Norwich Union and UK Insurance recorded double-digit increases in their expense ratios

Direct Line, Allianz and St Andrew's achieved strong expense ratio reductions

Combined ratios increased among the leading pecuniary loss insurers in 2006

The average combined ratio among the top 10 pecuniary loss insurers rose by 1.6 percentage points in 2006

Allianz, Direct Line, St Andrew's and Lloyds TSB reduced their pecuniary loss combined ratios

GEFI, UK Insurance and Pinnacle all experienced increases in their combined ratios

Performance ratio benchmarking in UK property insurance

Combined ratios rose for the top 10 property insurers in 2006 due to rising expenses and claims however most players remained in profitable territory

The average loss ratio of the top 10 property insurers increased by 0.1 percentage points in 2006, with Direct Line, Zurich and Norwich Union recording the biggest reductions

The average loss ratio of the top 10 property insurers increased by 0.1 percentage points

Norwich Union, Direct Line and Zurich recorded strong loss ratio reductions

St Andrew's, NIG and Royal & SunAlliance recorded high loss ratio increases

The average expense ratio of the top 10 property insurers increased in 2006, with Norwich Union and AXA recording the largest individual increases

The average expense ratio of the top 10 property insurers rose by 1.4 percentage points in 2006

Norwich Union, AXA and Lloyds TSB saw their expense ratios increase, but they achieved GWP growth

Four of the top 10 property insurers achieved expense ratio reductions

The average combined ratio of the top 10 property insurers rose in 2006, with Norwich Union, AXA and NIG seeing the largest increases

Among the top 10 UK property insurers, the average combined ratio rose by 1.5 percentage points in 2006

Norwich Union, AXA and NIG recorded high combined ratio growth

Three insurers were able to defy the property market trend and reduce their combined ratios

Appendix

Definitions

Average

Weighted average

Earned premiums

Gross premium

Net premium

Written premiums

Loss ratio

Expense ratio

Combined ratio

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Change in premium income compared to change in loss ratio for the top 10 UK accident and health insurers, 2005-06

Table 2: Change in premium income compared to change in expense ratio for the top 10 UK accident and health insurers, 2005-06

Table 3: Change in premium income compared to change in combined ratio for the top 10 UK accident and health insurers, 2005-06

Table 4: Change in premium income compared to change in loss ratio for the top 10 UK liability insurers, 2005-06

Table 5: Change in premium income compared to change in expense ratio for the top 10 UK liability insurers, 2005-06

Table 6: Change in premium income compared to change in combined ratio for the top 10 UK liability insurers, 2005-06

Table 7: Change in premium income compared to change in loss ratio, top 10 UK motor insurers, 2005-6

Table 8: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-6

Table 9: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-6

Table 10: Change in premium income compared to change in loss ratio for the top 10 UK pecuniary loss insurers, 2005-06

Table 11: Change in premium income compared to change in expense ratio for the top 10 UK pecuniary loss insurers, 2005-06

Table 12: Premium income compared to change in combined ratio for the top 10 UK pecuniary loss insurers, 2005-06

Table 13: Premium income compared to change in loss ratio for the top 10 UK property insurers, 2005-06

Table 14: Change in premium income compared to change in expense ratio among the top 10 property insurers, 2005-06

Table 15: Change in premium income compared to change in combined ratio for the top 10 UK property insurers, 2005-06

List of Figures

Figure 1: Only two of the top 10 UK accident and health insurers achieved better loss ratios in 2006

Figure 2: Numerous UK accident and health insurers saw their expense ratios increase in 2006

Figure 3: Six of the top 10 UK accident and health insurers recorded higher combined ratios in 2006

Figure 4: Norwich Union achieved the biggest reduction in its liability loss ratio in 2006

Figure 5: New Hampshire saw the largest increase in its expense ratio in 2006

Figure 6: Most of the top 10 UK liability insurers saw their combined ratio deteriorate in 2006

Figure 7: While the average loss ratio of the top 10 UK motor insurers fell in 2006, NIG and Direct Line saw increases in their ratios

Figure 8: Norwich Union saw the biggest increase in private motor expense ratio in 2006

Figure 9: NIG saw the biggest increase in combined ratio in 2006

Figure 10: A number of UK pecuniary loss insurers recorded significant GWP decline in 2006, although some were also able to decrease their loss ratios as a result

Figure 11: Direct Line achieved strong GWP growth and reduced its expense ratio in 2006, although fellow RBS subsidiary UK Insurance did not fare as well

Figure 12: Allianz, Direct Line and St Andrew's achieved the strongest pecuniary loss combined ratio reductions in 2006, largely through decreasing their expense ratios

Figure 13: Direct Line, Zurich and Norwich Union saw the best decreases in loss ratio in 2006

Figure 14: St Andrew's was the only insurer to successfully reduce its expense ratio and at the same time increase its property insurance GWP in 2006

Figure 15: Direct Line and Churchill saw the biggest reductions in combined ratio in 2006 "

Abstract

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