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Commercial Non-Life Insurance Brokers in Europe

  • August 2016
  • -
  • Finaccord
  • -
  • 318 pages

Finaccord’s report titled Commercial Non-Life Insurance Brokers in Europe, plus the BrokerBASE™ and market data annexe that accompany it, investigate the importance of brokers in the distribution of non-life (P&C) insurance for business, public sector and not-for-profit customers in 20 countries in Europe. Brokers are the most important single distribution channel in this sector, and Finaccord’s research indicates that fees and commissions earned by brokers from commercial lines insurance in Europe were worth EUR 11.61 billion in 2015. Moreover, brokers are increasing their share of this market in many countries, often at the expense of tied agents, and in most cases are expected to continue growing their overall share in future.

This report first provides unique data for the size, segmentation and growth of the commercial non-life insurance market itself in each of the 20 countries in scope, namely Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Turkey and the UK. It then quantifies the share of this market that is intermediated by brokers and ranks the leading brokers in each country according to their revenues from commercial non-life insurance in 2015, excluding income from other activities. This analysis is based on an investigation covering 545 brokers in Europe, making it the most detailed and comprehensive study of this market ever published.

This report can be used in one or more of the following ways:

- to evaluate the commercial lines broking market across 20 countries in Europe by means of a study that employs a uniform and standardised methodology to guarantee comparability;

- to quantify the value of this market and how revenues from it in each country break down between micro, small, medium, large and very large entities;

- to understand the competitive landscape in each country as defined by its market concentration, the position of international brokers and the members of international broker networks;

- to identify the leading brokers in each country or across the European region as a whole, with coverage of competitors such as Arthur J. Gallagher, Ecclesia Gruppe, Filhet-Allard, Funk Gruppe, GrECo International, Howden Broking Group, JLT, Lockton, and Verspieren, as well as Aon, Marsh & McLennan Companies and Willis Towers Watson;

- to gain insight into the likely future trajectory of the commercial lines broking market up to 2019 including its forecast value and the predicted distribution share of brokers in commercial non-life insurance that will generate that value.

Table Of Contents

Commercial Non-Life Insurance Brokers in Europe
0.0 EXECUTIVE SUMMARY . 1
Europe's commercial non-life insurance market was worth over EUR 130 billion in premiums in 2015 2
.and increased in real terms in ten countries between 2011 and 2015 . 3
Brokers constitute the most important distribution channel for commercial lines in most markets 4
More than a quarter of the EUR 11.61 billion commercial non-life broking market is derived from the UK . 5
Between 2011 and 2015 brokers' revenues grew more rapidly in Turkey than in any other country 6
The top three broking groups hold a combined market share of just over 30% across the region 6
Brokers are expected to increase their commercial lines distribution share in 16 out of 20 countries… . 7
… which will mean that the associated broking market will rise, even stated in real terms, in 18 countries 7
1.0 INTRODUCTION 9
What is this report about? 9
The focus is uniquely on commercial non-life (PandC) insurance, excluding other types of business. . 9
.and on brokerage, even where intermediaries can act as both agents and brokers . 9
Rationale . 9
In many countries, brokers constitute the most important distribution channel for commercial lines . 9
Methodology . 10
Research program 10
Market data analysis . 10
Definitions . 11
Premiums 11
Size of insured entity. 11
Abbreviations 11
BrokerBASE . 11
Finaccord 12
2.0 EUROPEAN OVERVIEW 15
Commercial non-life insurance market . 15
The European commercial non-life insurance achieved modest growth between 2011 and 2015 . 15
Germany, France and the UK account for more than a half of commercial lines premiums in Europe . 15
Turkey and Russia registered the sharpest growth rates in nominal terms 16
After taking inflation into account, ten markets contracted in real terms 17
Property, motor and liability insurance account for more than three quarters of the market 19
Across Europe as a whole, commercial motor insurance grew most rapidly between 2011 and 2015 . 20
Across the 20 countries, around EUR 32.8 billion of premiums are paid by micro-sized clients… 22
… which generate the highest proportion of total commercia lines premiums in Italy 22
Commercial non-life insurance brokers 24
Overview of brokers' presence in the distribution of commercial non-life insurance 24
Brokers distribute more than 60% of commercial lines business in Europe… 24
… and are most important as distributors of commercial non-life insurance in Ireland and the UK… . 25
Brokers' distribution share increased in 16 of the 20 countries between 2011 and 2015. 25
UK, France, and Germany are Europe's largest markets in terms of commercial lines broking revenues 27
These revenues increased in real terms between 2011 and 2015 in 14 of the 20 countries in scope 28
The largest clients generate just under 30% of total commercial lines broking revenues in the 20 countries… . 30
… and over a half of the total in Russia but less than 20% in Italy 30
Market concentration 32
Germany and Spain feature Europe's least concentrated markets for commercial lines broking 32
The top three broking groups account for just over 30% of commercial lines broking revenues… . 34
… and they are nearly always ranked among the top ten brokers in any given country 35
Future outlook . 36
The future direction of commercial lines broking revenues is dependent on a number of factors… 36
… which point to the Turkish market as being the one that will generate the most real growth… . 36
… albeit all but two of the 20 markets should experience growth in real terms from 2015 to 2019 . 37
By 2019, the commercial lines broking market in Europe is likely to be worth around EUR 12.73 billion 39
3.0 AUSTRIA . 42
Introduction . 42
Regulatory information . 42
Several professional associations exist for insurance brokers and agents in Austria… . 42
… the largest of which has around 1,000 members 42
Commercial non-life insurance market . 43
Commercial non-life insurance premiums in Austria have risen consistently in recent years… 43
… both in terms of year-on-year progress and growth across each of the main segments . 44
Medium-sized customers account for the highest proportion of commercial lines premiums 46
Commercial non-life insurance brokers 47
Overview of brokers' presence in the distribution of commercial non-life insurance 47
Brokers' distribution share in commercial non-life insurance has edged up since 2011 47
More than a quarter of commercial lines broking revenues are attributable to one customer segment 49
Competitor trends . 50
The top ten competitors account for nearly 60% of commercial lines broking revenues. . 50
. with GrECo International retaining its leading position in this market 50
Aon is ranked second but other international brokers are less prominent 50
The increasing concentration in this market has been caused in part by merger and acquisition activity . 51
If counted together, brokerages owned by Raiffeisen banks would be ranked third 51
Commercial lines broking is the principal income generator for all of the top 30 brokers… . 52
… with several deriving over 95% of their revenues from this activity . 52
International broker networks . 54
A number of brokers ranked outside of the top 30 are members of international networks . 54
Future outlook . 54
Modest growth is forecast for the Austrian commercial lines broking market up to 2019 . 54
4.0 BELGIUM 56
Introduction . 56
Regulatory information . 56
The number of registered insurance intermediaries has more than halved in recent years… . 56
… although brokers continue to play a key role in commercial lines distribution 56
Commercial non-life insurance market . 57
Commercial non-life insurance premiums in Belgium have been growing at a consistent rate… . 57
… with those for the residual category of other commercial insurance having risen most rapidly . 58
Customers in the micro segment account for over 30% of total commercial lines premiums 59
Commercial non-life insurance brokers 61
Overview of brokers' presence in the distribution of commercial non-life insurance 61
The distribution share of brokers in commercial lines may have reduced very slightly since 2011 . 61
Customers in the micro segment also generate a significant proportion of broking revenues . 62
Competitor trends . 64
The three leading commercial lines brokers in Belgium are far ahead of the fourth-ranked competitor 64
… with Marsh having boosted its position through the acquisition of Trade Insure in 2015 . 64
Van Dessel has relinquished control of Bokiau to Alliance Participations . 64
For only one broker in the top 25 is commercial non-life insurance not the principal source of income… 65
… and for two of them it is the only activity from which they generate revenues 65
International broker networks . 67
Belgibo, Induver, Van Dessel and Vanbreda Risk and Benefits each belong to more than one network . 67
Future outlook . 67
The commercial lines broking market will deliver further steady growth up to 2019 . 67
5.0 CZECH REPUBLIC 69
Introduction . 69
Regulatory information . 69
Intermediaries can act simultaneously as both agents and brokers 69
Commercial non-life insurance market . 70
In real terms, commercial non-life insurance premiums in the Czech Republic have stagnated . 70
Premiums split quite evenly across the five categories of insured entity as defined by their size 72
Commercial non-life insurance brokers 73
Overview of brokers' presence in the distribution of commercial non-life insurance 73
The distribution share of brokers in commercial lines is likely to have increased since 2011 73
Almost a quarter of commercial lines broking revenues are attributable to the largest client segment 75
Competitor trends . 76
The acquisition of Insia by Marsh and McLennan Companies has caused the market to consolidate . 76
RENOMIA is active in several overseas markets as well as the Czech Republic 76
Two of the top 20 brokers generate all of their revenues from commercial non-life insurance 78
International broker networks . 80
MAI Insurance Brokers and RENOMIA are both affiliated to five networks 80
Future outlook . 80
The value of the commercial lines broking market is likely to continue growing at a reasonable rate . 80
6.0 DENMARK 82
Introduction . 82
Regulatory information . 82
In the vast majority of cases, brokers must be remunerated through fees, not commissions 82
Commercial non-life insurance market . 83
The Danish market for commercial non-life insurance has struggled to grow in recent years… . 83
…with premiums for commercial liability insurance having fallen back most rapidly 83
Insured entities in the micro segment generate nearly one quarter of premiums in this market 84
Commercial non-life insurance brokers 86
Overview of brokers' presence in the distribution of commercial non-life insurance 86
Brokers are likely to have increased their distribution share of commercial lines premiums since 2011 . 86
The micro segment contributes much less to brokers' revenues than to commercial lines premiums 88
Competitor trends . 90
The structure of the Danish commercial lines broking market changed little between 2011 and 2015 . 90
Willis Towers Watson is comfortably ahead of its closest competitor 90
Commercial lines broking is the most important source of revenue for nine of the top ten brokers . 91
International broker networks . 92
Söderberg and Partners Denmark is affiliated to eight different international networks . 92
Future outlook . 93
Revenue growth in the commercial lines broking market will be derived from a combination of factors . 93
7.0 FINLAND . 95
Introduction . 95
Regulatory information . 95
As in some other countries, regulations dictate that brokers are paid through fees, not commissions 95
Commercial non-life insurance market . 96
The Finnish market for commercial non-life insurance was worth over EUR 2 billion in 2015… . 96
… having grown at a fairly consistent rate since 2011 . 96
Premiums split quite evenly across five categories of insured entity as defined by their size 98
Commercial non-life insurance brokers 99
Overview of brokers' presence in the distribution of commercial non-life insurance 99
While slowly rising, the distribution share of Finnish brokers in commercial non-life insurance remains low… 99
… and close to a half of their revenues from this activity is due to the largest client category . 100
Competitor trends . 103
The Finnish commercial lines broking market is a very concentrated one… 103
… in which several significant acquisitions have taken place in recent years . 103
Commercial lines broking is the most important source of revenue for all ten of the leading brokers . 104
International broker networks . 105
Five of the 15 international networks investigated lack a Finland-based member 105
Future outlook . 106
Between 2015 and 2019, the commercial lines broking market will grow in value by more than a third . 106
8.0 FRANCE 108
Introduction . 108
Regulatory information . 108
The number of brokers in France is increasing while the number of agents is in decline 108
Commercial non-life insurance market . 109
Commercial non-life insurance premiums in France have stagnated in recent years… 109
… with only commercial motor insurance growing in real terms 110
One customer segment (as defined by number of employees) accounts for almost 30% of premiums . 112
Commercial non-life insurance brokers 113
Overview of brokers' presence in the distribution of commercial non-life insurance 113
Brokers have been successful in increasing their distribution share of commercial lines. 113
Over a third of commercial broking revenues are attributable to the segment of very large clients . 115
Competitor trends . 116
The concentration of the French commercial lines broking market has altered little in recent years… . 116
… in spite of Willis Towers Watson taking control of Gras Savoye . 117
Ardian has bought a majority stake in Siaci Saint-Honore . 117
Finaxy Group has been the most acquisitive of the larger brokers in France . 117
Several brokers generate all of their revenues from commercial non-life insurance… 118
… but others have a more diverse business mix . 118
International broker networks . 120
Diot belongs to the most international broker networks . 120
Future outlook . 121
The French commercial lines broking market should continue to grow at a modest rate up to 2019 121
9.0 GERMANY 123
Introduction . 123
Regulatory information . 123
There is a clear, long-term trend for an increasing number of insurance brokers in Germany… 123
… and a declining number of insurance agents… . 123
… albeit some ‘brokers' act more in the manner of multi-tied agents 124
Captive brokers owned by large industrial companies are an important feature of the German market . 124
The Verband Deutscher Versicherungsmakler lays claim to over 600 member firms 124
Commercial non-life insurance market . 124
Commercial non-life insurance premiums in Germany have been growing consistently… . 124
… with those for commercial motor insurance having risen most rapidly . 125
Premiums split quite evenly across the five categories of insured entity as defined by their size 126
Commercial non-life insurance brokers 128
Overview of brokers' presence in the distribution of commercial non-life insurance 128
In commercial non-life insurance, brokers are gradually eroding the distribution share of agents… . 128
… and are being helped by the introduction of more modern processes, such as e-trading solutions 128
Over one third of commercial lines broking revenues are attributable to the largest client segment . 129
Competitor trends . 131
Commercial non-life insurance broking in Germany still features a fragmented competitive structure. . 131
. with only the market leader claiming a market share of commercial lines revenues in excess of 10% . 131
Other brokers ranked in the top ten are characterised by a diverse range of ownership structures 132
The merger of MRH Group with Trowe will propel the combined entity further up the ranking of brokers 133
For a majority of the top 70 competitors, commercial lines broking is their most important activity… . 134
… although several of the largest entities derive very substantial revenues from employee benefits . 134
Several of the top 70 brokers in Germany specialise in particular sectors or product segments . 135
International broker networks . 138
Both Trust Risk Control and unisonBrokers lay claim to multiple broking members in Germany 138
Future outlook . 138
The commercial lines broking market is on track to be worth EUR 2 billion in revenues by 2019 . 138

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