UK Commercial Motor Insurance: Market Dynamics and Opportunities
The commercial motor insurance market grew slightly in 2015. This is a result of economic growth which has increased business prosperity and therefore the investment in commercial vehicles to support business expansion. The market remains at a COR of just under 100%; however, this has been strengthened by reserve releases. Without releases the market would be unprofitable, as insurers have been unable to keep rates in line with claims inflation. Rates have seen an increase due to a 3.5% rise in IPT in November 2015; however, excluding tax, rates have remained flat due to intensifying market competition. With the market in unprofitable territory it is therefore expected that rates will begin to harden over the next few years until government reforms are introduced, which may cause a lowering of claims costs. Claims cost fell initially when LASPO was implemented back in 2013, but the claims environment has now stabilized with some insurers reporting rises as the market has adjusted to the legislation.
The commercial motor parc has continued to increase in 2015 with LGVs and company cars driving the majority of growth. However, with the UK’s vote to leave the EU it is expected that growth of the motor parc will slow as businesses have less confidence and money to invest in new commercial vehicles until the economy begins to recover. While reforms will provide instant benefits upon implementation, telematics and driverless technology will help to reduce the frequency and severity of claims in the longer term.
GWP for the commercial motor insurance market grew by 1.0% to £3.99bn in 2015.
The COR rose by 1.6pp to 99.9% in 2015 but was strengthened by £101.9m in reserve releases.
The commercial motor parc enjoyed another year of growth. In 2015 the total commercial motor parc grew by 3.8% to 7.6 million vehicles.
The claims environment has begun to stabilize with some insurers reporting slight increases since the market has adjusted to LASPO.
Verdict Financial’s UK Commercial Motor Insurance: Market Dynamics and Opportunities report provides an in-depth analysis of the UK commercial motor insurance market. It looks at market size and performance ratios as well as changes in premiums, claims, road casualties, regulations, and opportunities. It 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 insurance models begin to enter the market.
Be prepared for how regulation will impact the commercial motor insurance market over the next few years.