Keywords : Insurance, general insurance, insurance provider, insurance industry
About This Report This unique market research report provides a detailed analysis of the UK general insurance industry with a specific focus on the personal lines segment . It sectors the industry by line of business and assesses underwriting profits and investment income. The research also includes an in-depth analysis of the distribution and key competitors and projections the personal lines industry size to 2014. What's In...
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About This Report
This unique market research report provides a detailed analysis of the UK general insurance industry with a specific focus on the personal lines segment . It sectors the industry by line of business and assesses underwriting profits and investment income. The research also includes an in-depth analysis of the distribution and key competitors and projections the personal lines industry size to 2014.
What's Included in This Report?
Data on the size, structure and profitability of the total non-life industry and the personal lines segment .
Insight into the different methods of distributing personal lines insurance products and the changes in the landscape.
Analysis of the total premiums and industry share for the largest personal lines insurance groups.
Key Market Facts
Over the next few years, there will be an increasing number of motor insurers and other distributors seeking to enter the household industry due to its higher profitability and lower industry saturation. The new entrants to the industry will increase competition and exert downward pressure on premium rates.
Underwriting cycles are visible in the insurance market, and take place over the course of several years. The progression of these cycles is visible in the CORs shown in Figure 1 below, between 1988 and 1994 and 1994 and 2004, as well as in the total industry underwriting profit/loss progressions.
In 2009, the industry share held by bancassurers dropped by 4 percentage points to 13%, after remaining at around 16–17% since 2005. While banks and building societies have largely held onto their share of the private motor insurance industry, in 2009, their combined share of the household industry saw a drop of 2 points.
Why Should You Buy This Report?
How have the various forms of personal insurance been performing in terms of GWP and profitability?
Which insurers hold the highest GWP and advertising spend in 2009?
How should my insurance industry player be structuring their personal lines policy book?
Insurance Industry in the United Kingdom
TABLE OF CONTENTS
Overview 1
Catalyst 1
Summary 1
Summary 2
The personal insurance industry contracted in 2009 2
The change in the top 10 personal insurance competitors is predicted to continue due to strategy and sizeable corporate partnerships 2
Total personal lines premiums are expected to grow between 2010 and 2014 3
Market Context 10
Introduction 10
Overall industry deterioration was less pronounced during 2009 10
The total industry COR remained steady 16
Trading results continued to fall for the total industry 21
Lower reserves were released during 2009 24
Total personal insurance GWP continued to decline 25
All lines of personal insurance saw a rise in COR in 2009 27
Distribution 32
Introduction 32
Direct insurers and brokers gained industry share 32
Direct Line remains the highest personal insurance advertiser 35
Just over 80% of advertising spending is channeled via TV and direct mail 37
Motor insurance continues to be the focus of the majority of advertising campaigns 40
Competitive Dynamics 42
Introduction 42
The top six personal insurers retained their positions in the industry 42
The top 6-10th personal general insurers make up 15% of the personal lines industry 44
Future Decoded 48
Total personal lines GWP will increase over the next five years 48
Private motor GWP is predicted to see strong growth 49
The household segment will show modest growth 52
The personal pecuniary loss industry will decline further before improving 55
Accident and health GWP will see growth in the corporate healthcare space 58
Appendix 62
Definitions 62
Additional data 64
Further reading 69
Ask the analyst 69
Datamonitor consulting 69
Disclaimer 69
TABLE OF FIGURES
Chart 1: The total industry returned a better COR despite a slight fall in total premiums 11
Chart 2: Only general liability insurance grew in terms of premiums in 2009 13
Chart 3: ABI members make up 84% of the UK general insurance industry 15
Chart 4: Profit margins improved slightly for the total general insurance industry 17
Chart 5: The commercial insurance combined ratio noticeably improved 18
Chart 6: The property, pecuniary loss and liability insurance industry s all returned lower CORs 19
Chart 7: Underwriting losses took a turn for the worse for the motor insurance industry 20
Chart 8: Investment income improved during 2009 22
Chart 9: Reserve releases were lower than the levels recorded in 2008 24
Chart 10: Insurers in the pecuniary loss industry bolstered their reserves 25
Chart 11: Personal motor and household control nearly two-thirds of the personal insurance industry 26
Chart 12: Worsening CORs in 2009 overall signify tightened margins for personal insurers 27
Chart 13: Underwriting result by line of personal business, 1998–2009 (£m) 29
Chart 14: The household, and accident and health insurance lines made a combined reserve release of over GBP 215m 31
Chart 15: The direct channel has been growing steadily overall since 2000 33
Chart 16: RBSI brands dominated advertising spend in H1 2010 36
Chart 17: TV advertising spend comprised two-fifths of personal insurers' total industry ing budget 38
Chart 18: Motor insurance advertising accounted for nearly half the budget of the top 10 personal general insurance advertisers 40
Chart 19: GWP and industry share of the top 10 UK personal general insurance groups, 2007–09 46
Chart 20: After two years of contraction, the personal general insurance industry is set to grow in 2010 48
Chart 21: The private motor industry is predicted to reach GBP 10.8bn by 2014 51
Chart 22: The household insurance industry is predicted to grow to a GWP of GBP 7.9bn by 2014 54
Chart 23: The personal pecuniary loss industry is predicted to reach GBP 4.7bn by 2014 57
Chart 24: Claims inflation will help drive the accident and health GWP to a projection ed GBP 5.9bn by 2014 60
TABLE OF TABLES
Data table 1: Annual GWP growth and COR for the UK general insurance industry, 2000–09 12
Data table 2: Total industry GWP by line of business (£m), 1990–2009 14
Data table 3: UK insurance industry, split by proportion of ABI members and Lloyd's of London 16
Data table 4: Total industry COR (%), 2005–09 17
Data table 5: Total industry accident year CORs by line of business, 2005-09 (%) 19
Data table 6: Underwriting result by line of business (£m), 1998–2009 21
Data table 7: Underwriting result, investment income and trading result as a percentage of NWP, worldwide business of UK insurers, 2000–09 23
Data table 8: UK personal general insurance GWP, 2006-09 (£m) 26
Data table 9: Accident year CORs by line of personal business, 2005–09 (%) 28
Data table 10: Underwriting result by line of personal business, 1998–2009 (£m) 30
Data table 11: Personal general insurance GWP distribution, by channel, 1999–2009 34
Data table 12: Top 10 personal general insurance advertisers 2008–H1 2010 (£) 37
Data table 13: Total personal general insurance advertisers' spend by media, 2008–H1 2010 (£) 39
Data table 14: Top 10 personal general insurance advertisers' spend by media, 2008–H1 2010 (£) 39
Data table 15: Total personal general insurance advertisers' spend by line of business, 2008–H1 2010 (£000s) 41
Data table 16: GWP and industry share of the top 10 UK personal general insurance groups, 2008–09 47
Data table 17: Projection of personal general insurance GWP, 2006–14f (£m) 49
Data table 18: Key variables affecting private motor insurance GWP, 2010–14f 50
Data table 19: Projection of private motor insurance GWP, 2006–14f (£m) 52
Data table 20: Key variables affecting household insurance GWP, 2010–14 53
Data table 21: Projection of household insurance GWP, 2006–14f (£m) 55
Data table 22: Key variables affecting personal pecuniary loss insurance GWP, 2010–14 56
Data table 23: Projection of personal pecuniary loss insurance GWP, 2006–14f (£m) 58
Data table 24: Key variables affecting accident and health insurance GWP, 2010–14 59
Data table 25: Projection of personal pecuniary loss insurance GWP, 2010-14 (£m) 61
Data table 26: Total UK pecuniary loss underwriting account, 1998–2009 64
Data table 27: Total UK property underwriting account, 1998–2009 65
Data table 28: Total UK household underwriting account, 1998–2009 65
Data table 29: Total UK commercial property underwriting account, 1998–2009 66
Data table 30: Total UK motor underwriting account, 1998–2009 66
Data table 31: Total UK personal motor underwriting account, 1998–2009 67
Data table 32: Total UK commercial motor underwriting account, 1998–2009 67
Data table 33: Total UK liability underwriting account, 1998–2009 68
Data table 34: Total UK accident and health underwriting account, 1998–2009 68
