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United Kingdom Insurance Report Q1 2016

  • December 2015
  • -
  • Business Monitor International
  • -
  • 47 pages

Includes 3 FREE quarterly updates

BMI View: On the whole, we anticipate that life insurance premium growth will be both more stable andprofitable than in the non-life sector in the coming years. This is due primarily to the stability and strengthof the underlying demographic life insurance drivers, which serve to insulate the sector from othermacroeconomic or political influences. In the short term, the strength of the USD will reduce the trajectoryof premiums when expressed in that currency. But the market's strengths will ultimately prevail and weexpect life premiums to rise by nearly 7.5 annually through 2019. Non-life premiums are forecast to hoverjust below 1.5% annually. Continued consolidation is also expected, as market conditions foster greatercompetition, lower prices and product innovation, favouring the major insurers over smaller ones.

Key Updates & Forecasts

- Regulatory changes continue to alter the insurance landscape in the UK. On November 1 2015, the newInsurance Premium Tax (IPT) came into force, raising the tax rate on motor and home policies from 6%to 9.5%. This is likely to push customers to seek additional cost savings, putting downward pressure onpremium pricing and further stressing smaller insurers that are already struggling to compete withindustry leaders. This supports our view that we will see more mergers and acquisitions in this market inlight of a continued positive earnings environment and competition across the industry. The overhaul ofthe UK's pension system has, in general, brought a steep sales decline for annuities, as retirees are nolonger required to purchase them. However, annuity sales did see their first quarterly rise in three years inthe third quarter of 2015, rising to GBP1.17GBP from GBP990mn, according to the Association ofBritish Insurers (ABI). Nevertheless, insurers are seizing this trend away from annuities as an opportunityto offset losses by developing new retirement offerings such as income drawdown products and making"bulk" deals with corporate pension schemes.

Table Of Contents

United Kingdom Insurance Report Q1 2016
BMI Industry View 5
Table: Headline Insurance Forecasts (United Kingdom 2012-2019) 5
Insurance 7
Industry Forecast 9
Life Premiums Forecast 9
Table: Life Premiums (United Kingdom 2012-2019) 11
Table: Life Insurance Claims (United Kingdom 2007-2014) 12
Non-Life Premiums Forecast 12
Table: Non-Life Premiums (United Kingdom 2012-2019) 15
Table: Non-Life Insurance Claims (United Kingdom 2008-2014) 16
Non-Life Sub-Sector Forecast 16
Table: Non-Life Insurance Premiums by Product Line (United Kingdom 2012-2019) 24
Industry Risk Reward Ratings 25
Developed States Insurance Risk/Reward Index 25
Table: Developed States Insurance Risk/Reward Index 26
Market Overview 27
Life Market Overview 27
The Product Offering 27
The Competitive Landscape 27
Table: Life Insurance Premiums (USDmn), 2009-2012 29
Non-Life Market Overview 30
The Product Offering 30
The Competitive Landscape 30
Table: Non-Life Premiums (USDmn), 2009-12 32
Company Profile 33
Ageas 33
Prudential plc 35
RSA 37
Standard Life 39
Methodology 41
Industry Forecast Methodology 41
Risk/Reward Index Methodology 44
Table: Indicators 46
Table: Weighting of Indicators 47

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