Competition in UK Private Motor Insurance 2007

Published by: Datamonitor

Published: Feb. 7, 2008 - 35 Pages

Table of Contents

DATAMONITOR VIEW

CATALYST

SUMMARY

ANALYSIS

Introduction

Two insurers exited the private motor market in 2006 and 2007

Provident sold its motor book to GMAC in May 2007

Legal & General ceased underwriting new private motor policies in 2006

The top 10 private motor insurers lost market share in 2006, although the market remained highly consolidated

Market leader RBSI maintained its grip on the private motor market in 2006

The top 10 private motor insurers lost market share in 2006

A number of the largest private motor insurers grew market share in 2006, despite competitive conditions

Direct Line's GWP remained stable in 2006

Royal & SunAlliance raised its market share and increased premium income in 2006

Fortis grew its private motor insurance market share in 2006 due to an increase in policy numbers

NIG grew its presence in the motor insurance market, gaining market share and GWP in 2006

Competitive conditions resulted in some top 10 players losing market share in 2006

The market leader, Norwich Union, lost the most market share of the top 10 in 2006

Churchill lost market share in 2006 as its non-comprehensive book contracted severely

Zurich's private motor GWP declined in 2006, leading to a contraction in market share

CIS's market share contracted in 2006 due to lower premium income

Two players, UKI and esure, saw no change in market share between 2005 and 2006

esure joined the top 10 private motor insurers despite decreasing private motor premium income

UKI saw its market share increase in 2006, though premium income declined

Mid-tier private motor insurers retained market share overall in 2006

Only a few private motor insurers in the 11-20 bracket managed to increase market share in 2006

AXA's private motor book rebounded in 2006 increasing by a substantial 43.5% in GWP terms

The NFU Mutual experienced modest premium income growth in 2006

Aioi Motor & General increased market share and premium income in 2006

Five mid-tier insurers lost market share in 2006

LV's market share declined by 0.3 percentage points in 2006 as it allowed premium income to contract

Provident's book continued to contract in 2006 as it sought to exit the UK private motor market

Groupama's private motor insurance book declined in 2006

HSBC experienced a decline in its private motor account in 2006

Allianz's GWP declined by more than 10% in 2006

Two mid-tier insurers saw minor declines in premium income but maintained market share in 2006

Highway's private motor book experienced a contraction in 2006, but maintained market share

MMA's market share remained stable although GWP reduced by 3.3% in 2006

Most of the top 10 insurers write some non-comprehensive and commercial business

Comprehensive premium income dominated the books of the largest private motor insurers

Six of the top 10 private motor insurers also write commercial motor insurance

The largest private motor insurers also tend to be the largest total motor insurers

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

APPENDIX

Definitions

Premium income measures

Earned premiums

Gross Premium

Net Premium

Written premiums

Other definitions

Channel

Direct insurer/writer

Brokers

Bancassurers

Brandassurers

Platform

2005-06 definitions for line of business

Motor

Total private motor

Total commercial motor

Private motor comprehensive

Private motor non-comprehensive

Motorcycle

Fleets

Commercial vehicles (non-fleet)

Pre-2005 definitions for lines of business

Motor

Methodology

Primary and secondary research

Market size

Changes in market size information

Market size methodology

Lloyd's players and underwriting result figures

Competitor data

CIS

GWP versus GEP reporting

Home-Foreign, overseas and facultative reinsurance business

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Top 10 UK private motor insurers' market share in 1996, 2005 and 2006

Table 2: Top 10 UK private motor insurers by market share, 2002-06

Table 3: Top 10 UK private motor insurers by premium income, 2002-06, (£000s)

Table 4: UK private motor insurers ranked 11-20 by market share, 2002-06

Table 5: UK private motor insurers ranked 11-20 by premium income, 2002-06, (£000s)

Table 6: Top 10 UK private motor insurers' comprehensive and non-comprehensive shares of total GWP, 2005-06, (£000s)

Table 7: Top 10 UK private motor insurers' GWP split by private and commercial, 2006, (£000s)

Table 8: Top 10 UK motor insurers' GWP split by private and commercial, 2006, (£000s)

Table 9: Change in premium income compared to change in loss ratio, top 10 UK motor insurers, 2005-06

Table 10: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-06

Table 11: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-06

List of Figures

Figure 1: The top 10 insurers controlled more of the market in 2006 than in 1996

Figure 2: Norwich Union remained the single largest insurer in the UK market in 2006

Figure 3: Insurers in the 11-20 segment showed very little difference in market share in 2006

Figure 4: None of the top 10 insurers wrote a substantial part of their business in the non-comprehensive market

Figure 5: Most of the top 10 UK private motor insurers also maintain a presence in the commercial market

Figure 6: The top 10 UK private insurers dominate the top motor rankings due to the size of their private books

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

Abstract

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