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UK Commercial Property Insurance: Market Dynamics and Opportunities 2018

UK Commercial Property Insurance: Market Dynamics and Opportunities 2018

Summary

UK Commercial Property Insurance: Market Dynamics and Opportunities 2018, report provides an in-depth analysis of the UK commercial property insurance market. Among the points discussed include the size of the market, performance ratios, as well as changes in premiums, claims, incidents of peril, regulations, and opportunities. The report provides a thorough overview of the market along with future forecasts.

The commercial property insurance sector continues to endure low premium rates and steady annual gross written premium (GWP) increases. As a result, the value of the market is expected to experience small, incremental increases in GWP over the coming years. The market remains competitive with the leading players retaining similar shares year-on-year, keeping premium rates at stubbornly low levels. In a market that is dependent on external factors such as the overall health of the economy and weather conditions, it remains difficult to predict an outcome for the commercial property insurance sector. The benign claims environment throughout 2017 was encouraging for insurers, but the effect of severe weather at the beginning of 2018 is likely to impact the market in the immediate year ahead.

Scope

  • This report provides an in-depth analysis of the UK commercial property insurance market.
  • Among the points discussed include the size of the market, performance ratios, as well as changes in premiums, claims, incidents of peril, regulations, and opportunities.
  • The report provides a thorough overview of the market along with future forecasts.
Reasons to buy
  • Benchmark yourself against the rest of the market.
  • Ensure you remain competitive as new innovations and significant market developments occur.
  • Be prepared for how the commercial property sector could be affected following the UK’s decision to leave the European Union.


  • Executive Summary
    • Market summary
    • Key findings
    • Critical success factors
  • Market Dynamics
    • Introduction
    • The commercial property market showed steady GWP growth
      • GWP increased by 3.3% in 2017 as IPT was passed on to consumers
        • Table Figure 1: Commercial property insurance saw steady growth in 2017
      • Insurers hardened rates to turn a profit in 2016 and 2017, after a tough 2015
        • Table Figure 2: The sector has only seen one year of negative profit since 2011
        • Table UK commercial property underwriting results, 2009-17
      • Market COR increased in 2017, but remains under 100%
        • Table UK commercial property insurance market claims ratio, expenses ratio, and COR, 2013-17
        • Table Figure 3: The commercial property market recorded a COR of 99.3% in 2017
        • Table Figure 4: 2016 was a challenging year for claims, with 2017 performing more in line with previous years
        • Table UK commercial property gross claims incurred (£m), by type of claim, 2013-17
        • Table Figure 5: 2017 saw an improvement on claims notified compared to 2016
        • Table UK commercial property number of claims notified (000s), 2013-17
  • Market Opportunities
    • New construction rose in 2017, but dipped in early 2018
      • Table Construction output, non-seasonally adjusted, current prices by sector (£000s), 2014-17
      • Table Construction output, non-seasonally adjusted, current prices by sector CAGR, 2015-17
      • Table Volume and percentage point increases in all categories of UK construction, May 2018
      • Table Figure 6: New housing work continues to grow
      • Table Proportion of residential and commercial property rented in the UK, 2004, 2014, and 2017
      • Table Figure 7: Commercial property remains larger than residential
      • Regulation has dampened interest in commercial property investment
        • Table Figure 8: The number of buy-to-let mortgages crashed after Q1 2016, but remortgages are on the rise
    • A strong H2 in 2017 saw the real estate sector match 2016 lending
    • Global investment in London is booming
      • Table Figure 9: London dominates foreign investment in commercial property
    • Rents are rising slowly across commercial sectors
      • Table Figure 10: Industrial rents rose sharply in Q2 2018
      • Table Figure 11: Industrial rent in London is by far the highest across the UK
      • Table The cost of prime industrial rents in selected cities in the UK (euros per sq. meter)
      • Table Figure 12: Yield growth has largely dropped across commercial property categories to June 2018
      • Immigration and vacant property rates could prove detrimental to the commercial sector
        • Table Figure 13: The UK population has risen by just under 10% since 2005
        • Table Population estimates summary for the UK, 2015-17
    • Fly tipping has become a significant issue
  • Competitor Landscape
    • The top five insurers dominate the market
      • Table Figure 14: Aviva and RSA saw growth in market shares in 2017
      • Table Market shares by GWP for the top 10 players in the commercial property market, 2016-17
      • Table GWP for the top 10 players in the commercial property market (£m), 2016-17
      • Aviva is focusing on claims with a new partnership
      • AXA completed a merger with XL Catlin to create a global property & casualty powerhouse
        • Table Figure 15: AXA uses apps to target smaller commercial players
    • Technology and preventative measures are emerging in the market
      • RSA is targeting prevention with the relaunch of the RSAred database
        • Table Figure 16: The RSAred dashboard looks to provide customers with real-time data
      • Allianz is prioritizing brokers
      • Cytora is a rare tech player to influence the market
      • FloodFlash aims to offer fairer cover to businesses in areas of flood risk
      • BIBA is looking towards drone insurance
  • Future Developments and Beyond
    • The immediate future will be defined by the weather and Brexit
      • GWP will rise above £6.3bn by 2022
        • Table Figure 17: The commercial property market will reach £6.3bn by 2022
        • Table Commercial property insurance market forecast for GWP and annual growth, 2017-22f
    • Brexit will have a significant impact on the industry
      • The construction industry is lobbying government on labor availability
      • Overseas investors continue to be encouraged by favorable exchange rates
        • Table The value of £1 in the leading 10 global currencies, September 2018
        • Table Figure 18: Pound sterling is losing ground on the US dollar following the Brexit vote
      • New regulation for overseas investors is expected
    • The Draft London Plan outlines projects to maintain status
    • Technology and the sharing economy are reshaping elements of the market
      • Airbnb is disrupting the market
      • Shared office space is taking off around the world
        • Table Figure 19: The WeWork app allows companies to rent office space by the hour
      • Homes can now be built by 3D printers
    • 2018 is expected to be a record year for commercial property sales
    • The logistics and industrial sectors look set for healthy growth
  • Appendix
    • Abbreviations and acronyms
    • Bibliography
    • Further reading
    • About GlobalData
      • Table Figure 20: About GlobalData

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