|
|
 |
|
Viewing report
|
|
|
|
UK Commercial Insurance Distribution 2004
Datamonitor, Oct 2004, Pages: 275
TABLE OF CONTENTS
CHAPTER 1 EXECUTIVE SUMMARY 3
Introduction 3
Market context 3
The general insurance market continued to grow strongly in 2003 3
The commercial market continues to outpace the personal sector 4
Distribution 4
Brokers are the main force in the commercial market 4
Datamonitor’s Commercial Broker Survey 4
Customer focus 6
Significant growth in the number of UK companies occurred in 2003 6
Datamonitor’s SME Survey 7
Competitive dynamics 9
Top 10 brokers maintained a steady market share in 2003 9
Multinationals are particularly prominent in the large corporate client sector 9
Various issues could cause changes to the broker landscape 9
The future decoded 10
Key issues affecting the future of commercial insurance distribution 10
Market share forecasts 10
CHAPTER 2 INTRODUCTION 34
Overview 34
What is this report about? 34
Who is the target reader? 35
How to use this report 36
CHAPTER 3 MARKET CONTEXT 37
Introduction 37
General insurance market overview 37
Total market size by lines of business 37
Insurance market split by commercial and personal business 39
The commercial market continues to outpace the personal sector 39
Commercial market by line of business 40
CHAPTER 4 DISTRIBUTION 45
Introduction 45
Distribution channel splits 45
Datamonitor’s commercial market splits 45
Independent intermediaries 47
Company staff 48
Tied agents 48
Banks/building societies 48
Direct 48
Utilities/retailers/affinity groups 49
Datamonitor’s Commercial Broker Survey 49
Satisfaction 49
Premium rate rises 53
Broker networks 56
Competitive threat 59
Impact of FSA regulation 60
Product development 66
Acquisition activity 67
CHAPTER 5 CUSTOMER FOCUS 72
Introduction 72
Number of enterprises in the UK 72
Significant growth in the number of UK companies occurred in 2003 72
Small businesses are far more numerous than any other size of company 73
Customer segmentation 76
Customer retention 77
Customer retention by broker segment 78
Customer retention by broker 80
Datamonitor’s SME Survey 85
Purchase behavior 85
Future purchase considerations 93
Satisfaction 107
Advice requirements 110
Premium rate rises and their impact 112
Loyalty and switching behavior 116
CHAPTER 6 COMPETITIVE DYNAMICS 122
Introduction 122
Broker segmentation 122
Multinational brokers 122
National brokers 122
Superprovincial brokers 123
Provincial brokers 123
Broker market share 123
Market share by client company aggregate turnover 127
Market share by number of clients 129
Analysis of multinational brokers by aggregate turnover of client companies 131
Analysis of brokers by number of employees within client companies 133
Analysis of brokers by industry sector 136
Issues affecting the competitive landscape within the UK broker market 138
Broker networks 138
Self-insurance and ART 142
The direct channel – a serious threat? 145
Banks and building societies 149
Utilities and affinity groups 151
CHAPTER 7 THE FUTURE DECODED 153
Introduction 153
Key issues affecting the future of distribution 153
imarket will streamline distribution for all commercial insurance competitors 153
Regulation will lead to higher standards of service 154
Demographics will be the principal catalyst of consolidation 155
Forecast market shares of distribution channels in the commercial general insurance market 156
Underlying assumptions 156
Forecasts 158
CHAPTER 8 APPENDIX 160
Commercial broker survey data tables 160
Satisfaction 160
Premium rate rises 162
Broker networks 163
Competitive threat 165
Impact of FSA regulation 167
Product development 169
Acquisition activity 170
SME Survey data tables 172
Purchase behavior 172
Future purchase considerations 175
Satisfaction 181
Advice requirements 183
Premium rate rises and their impact 184
Loyalty and switching behavior 186
Datamonitor’s Insurance Broker Database 190
Methodology 190
Total broker market by total client turnover and client number 192
The broker market split by client turnover band 199
The total broker market split by number of employees in client companies 216
The broker market split by client employee number bands 222
The broker market split by client industry sector 237
Survey methodology 269
Commercial Broker Survey 269
SME Survey 269
Definitions 269
ABI definitions of distribution channels 270
Commercial general insurance 270
Research methodology 273
Current publications 273
Future publications 273
Relevant links 273
Our custom research capabilities 274
SPP writing team 275
LIST OF TABLES
Table 1: Total general insurance market GWP, by sector, 1999-2003 38
Table 2: General insurance market split between personal and commercial sectors, 1999-2003 40
Table 3: Commercial general insurance market premium income and year-on-year growth, split by sector, 1999-2003 43
Table 4: Market share of distribution channels in commercial general insurance market, 2002-4 46
Table 5: Number of enterprises, employees and turnover by size of enterprise, 2003 75
Table 6: Breakdown of companies that changed broker between 2003 and 2004 78
Table 7: Switching of commercial clients between broker segments, 2004 80
Table 8: Acquisition and retention performance of top four brokers, 2004 81
Table 9: Customer retention within Aon, 2004 83
Table 10: Customer retention within Jardine Lloyd Thompson, 2004 83
Table 11: Customer retention within Marsh, 2004 84
Table 12: Customer retention within Willis, 2004 84
Table 13: Market share of brokers by client turnover band, 2004 126
Table 14: Market share of brokers by client turnover band, 2003 126
Table 15: Top 10 brokers by client aggregate turnover, 2003-4 129
Table 16: Top 10 brokers by number of clients, 2003-4 131
Table 17: Market share of multinational brokers by client size, 2004 133
Table 18: Market share of the top 10 brokers by number of employees in client companies, 2004 135
Table 19: Market share of top 10 brokers in 10 largest industry sectors by aggregated client turnover, 2004 137
Table 20: UK companies arranging insurance in-house, 2004 145
Table 21: Forecast market share of distribution channels in the commercial general insurance market, 2003-2008 159
Table 22: In general, how satisfied are you with your insurance provider? 160
Table 23: Why are you satisfied or very satisfied? 160
Table 24: Why are you dissatisfied or very dissatisfied? 161
Table 25: What do you value in an insurer? 161
Table 26: On average, by how much have motor insurance premiums changed in the last year? 162
Table 27: On average, by how much have property insurance premiums changed in the last year? 162
Table 28: On average, by how much have liability insurance premiums changed in the last year? 163
Table 29: Are you part of a broker network? 163
Table 30: If yes, what do you consider to be the biggest benefit of joining? 164
Table 31: If you are not part of a broker network, why not? 164
Table 32: What level of threat do direct insurers pose to your business? 165
Table 33: What level of threat do banks and building societies pose to your business? 165
Table 34: What level of threat does self-insurance and Alternative Risk Transfer (ART) pose to your business? 165
Table 35: What level of threat do brokers that are smaller than you pose to your business? 166
Table 36: What level of threat do brokers that are a similar size to you pose to your business? 166
Table 37: What level of threat do brokers that are larger than you pose to your business? 166
Table 38: Have you registered for FSA regulation? 167
Table 39: If no, what are you planning to do? 167
Table 40: In your opinion, will the FSA be able to deal with the number of applications in the timeframe allowed? 167
Table 41: Have you employed an advisory firm to help you with FSA regulation? 168
Table 42: How much do you estimate FSA regulation will cost you as a percentage of annual turnover? 168
Table 43: By how much do you think the number of brokers in the market will contract as a result of FSA regulation? 169
Table 44: Which product areas will develop fastest in the next 12 months? 169
Table 45: In the last 12-18 months have you acquired any brokers? 170
Table 46: If yes, how many? 170
Table 47: In the next 12-18 months are you planning on: 170
Table 48: If you are looking to acquire a broker, what attributes do you consider important? 171
Table 49: Where do you purchase your commercial insurance? 172
Table 50: How do your purchase your insurance? 172
Table 51: Which provider do you purchase your motor insurance from? 173
Table 52: Which provider do you purchase your property insurance from? 173
Table 53: Which provider do you purchase your liability insurance from? 174
Table 54: When was the last time you met your insurance provider? 174
Table 55: Why did you choose your current provider? 175
Table 56: Would you consider purchasing your commercial insurance direct from an insurer rather than through a broker? 175
Table 57: If so, why? 176
Table 58: If not, why not? 176
Table 59: Which insurance companies have you heard of that offer commercial insurance direct? 177
Table 60: Would you consider purchasing commercial insurance from your business bank rather than through a broker? 177
Table 61: If so, why? 178
Table 62: If not, why not? 178
Table 63: Who is your business bank? 179
Table 64: Would you consider purchasing insurance by telephone rather than through a broker? 179
Table 65: If so, why? 179
Table 66: If not, why not? 180
Table 67: Would you consider purchasing insurance online rather than through a broker? 180
Table 68: If so, why? 180
Table 69: If not, why not? 181
Table 70: How satisfied are you with your insurance provider? 181
Table 71: Do you have any problems obtaining particular types of insurance? 182
Table 72: What are the top three problems you have with insurance providers? 182
Table 73: How important is advice when purchasing commercial insurance? 183
Table 74: What advice would be most beneficial to you? 183
Table 75: By how much did your motor insurance premium change at last renewal? 184
Table 76: By how much did your property insurance premium change at last renewal? 184
Table 77: By how much did your liability insurance premium change at last renewal? 185
Table 78: What effect have premium increases had on your business? 185
Table 79: How long have you been with your current provider? 186
Table 80: If you have been with your provider for less than two years, why did you switch? 186
Table 81: Do you think that you will change provider in the next 12 months? 187
Table 82: If yes, why? 187
Table 83: Which is the top insurance provider you would approach for an alternative quote? 188
Table 84: If you were to change provider would you approach: 188
Table 85: Which sources would you use to identify your shortlist of potential providers? 189
Table 86: Total broker market from sample by client turnover and client number, 2004 192
Table 87: Total broker market from sample by client turnover and client number, 2004, cont. 193
Table 88: Total broker market from sample by client turnover and client number, 2004, cont. 194
Table 89: Total broker market from sample by client turnover and client number, 2004, cont. 195
Table 90: Total broker market from sample by client turnover and client number, 2004, cont. 196
Table 91: Total broker market from sample by client turnover and client number, 2004, cont. 197
Table 92: Total broker market from sample by client turnover and client number, 2004, cont. 198
Table 93: Brokers in sample with clients with turnover below £20m, 2004 199
Table 94: Brokers in sample with clients with turnover below £20m, 2004, cont. 200
Table 95: Brokers in sample with clients with turnover below £20m, 2004, cont. 201
Table 96: Brokers in sample with clients with turnover between £20.1 and £40m, 2004 202
Table 97: Brokers in sample with clients with turnover between £20.1 and £40m, 2004, cont. 203
Table 98: Brokers in sample with clients with turnover between £40.1 and £60m, 2004 204
Table 99: Brokers in sample with clients with turnover between £40.1 and £60m, 2004, cont. 205
Table 100: Brokers in sample with clients with turnover between £60.1 and £80m, 2004 206
Table 101: Brokers in sample with clients with turnover between £80.1 and £100m, 2004 207
Table 102: Brokers in sample with clients with turnover between £100.1 and £120m, 2004 208
Table 103: Brokers in sample with clients with turnover between £120.1 and £150m, 2004 209
Table 104: Brokers in sample with clients with turnover between £150.1 and £200m, 2004 210
Table 105: Brokers in sample with clients with turnover between £200.1 and £300m, 2004 211
Table 106: Brokers in sample with clients with turnover between £300.1 and £500m, 2004 212
Table 107: Brokers in sample with clients with turnover between £500.1 and £750m, 2004 213
Table 108: Brokers in sample with clients with turnover between £750.1m and £1bn, 2004 214
Table 109: Brokers in sample with clients with turnover in excess of £1bn, 2004 215
Table 110: Total broker market from sample by client employee no. and client companies, 2004 216
Table 111: Total broker market from sample by client employee no. and client companies, 2004, cont. 217
Table 112: Total broker market from sample by client employee no. and client companies, 2004, cont. 218
Table 113: Total broker market from sample by client employee no. and client companies, 2004, cont. 219
Table 114: Total broker market from sample by client employee no. and client companies, 2004, cont. 220
Table 115: Total broker market from sample by client employee no. and client companies, 2004, cont. 221
Table 116: Brokers in sample with clients with less than 10 employees, 2004 222
Table 117: Brokers in sample with clients with between 11 and 25 employees, 2004 223
Table 118: Brokers in sample with clients with between 26 and 50 employees, 2004 224
Table 119: Brokers in sample with clients with between 26 and 50 employees, 2004, cont. 225
Table 120: Brokers in sample with clients with between 51 and 100 employees, 2004 226
Table 121: Brokers in sample with clients with between 51 and 100 employees, 2004, cont. 227
Table 122: Brokers in sample with clients with between 101 and 250 employees, 2004 228
Table 123: Brokers in sample with clients with between 101 and 250 employees, 2004, cont. 229
Table 124: Brokers in sample with clients with between 251 and 500 employees, 2004 230
Table 125: Brokers in sample with clients with between 251 and 500 employees, 2004, cont. 231
Table 126: Brokers in sample with clients with between 501 and 1,000 employees, 2004 232
Table 127: Brokers in sample with clients with between 501 and 1,000 employees, 2004, cont. 233
Table 128: Brokers in sample with clients with between 1,001 and 5,000 employees, 2004 234
Table 129: Brokers in sample with clients with between 1,001 and 5,000 employees, 2004, cont. 235
Table 130: Brokers in sample with clients in excess of 5,000 employees, 2004 236
Table 131: Brokers from sample with clients in the aerospace and defense sector by client turnover and client number, 2004 237
Table 132: Brokers from sample with clients in the automobiles sector by client turnover and client number, 2004 238
Table 133: Brokers from sample with clients in the banking sector by client turnover and client number, 2004 238
Table 134: Brokers from sample with clients in the beverages sector by client turnover and client number, 2004 239
Table 135: Brokers from sample with clients in the chemicals sector by client turnover and client number, 2004 239
Table 136: Brokers from sample with clients in the construction and building materials sector by client turnover and client number, 2004 240
Table 137: Brokers from sample with clients in the distributors sector by client turnover and client number, 2004 241
Table 138: Brokers from sample with clients in the diversified industrials sector by client turnover and client number, 2004 242
Table 139: Brokers from sample with clients in the electricity sector by client turnover and client number, 2004 242
Table 140: Brokers from sample with clients in the electronic and electrical equipment sector by client turnover and client number, 2004 243
Table 141: Brokers from sample with clients in the engineering and machinery sector by client turnover and client number, 2004 244
Table 142: Brokers from sample with clients in the food and drug retailers sector by client turnover and client number, 2004 245
Table 143: Brokers from sample with clients in the food producers and processors sector by client turnover and client number, 2004 246
Table 144: Brokers from sample with clients in the forestry and paper sector by client turnover and client number, 2004 247
Table 145: Brokers from sample with clients in the general retail sector by client turnover and client number, 2004 247
Table 146: Brokers from sample with clients in the general retail sector by client turnover and client number, 2004, cont. 248
Table 147: Brokers from sample with clients in the health sector by client turnover and client number, 2004 249
Table 148: Brokers from sample with clients in the household goods and textiles sector by client turnover and client number, 2004 250
Table 149: Brokers from sample with clients in the information technology hardware sector by client turnover and client number, 2004 251
Table 150: Brokers from sample with clients in the insurance sector by client turnover and client number, 2004 251
Table 151: Brokers from sample with investment companies as clients by client turnover and client number, 2004 252
Table 152: Brokers from sample with clients in the leisure, entertainment and hotels sector by client turnover and client number, 2004 253
Table 153: Brokers from sample with clients in the life assurance sector by client turnover and client number, 2004 254
Table 154: Brokers from sample with clients in the media and photography sector by client turnover and client number, 2004 255
Table 155: Brokers from sample with clients in the mining sector by client turnover and client number, 2004 256
Table 156: Brokers from sample with clients in the oil and gas sector by client turnover and client number, 2004 257
Table 157: Brokers from sample with clients in the packaging sector by client turnover and client number, 2004 258
Table 158: Brokers from sample with clients in the personal care and household products sector by client turnover and client number, 2004 258
Table 159: Brokers from sample with clients in the pharmaceuticals sector by client turnover and client number, 2004 259
Table 160: Brokers from sample with clients in the real estate sector by client turnover and client number, 2004 260
Table 161: Brokers from sample with clients in the restaurants, pubs and breweries sector by client turnover and client number, 2004 261
Table 162: Brokers from sample with clients in the software and computer services sector by client turnover and client number, 2004 262
Table 163: Brokers from sample with clients in the specialty and other finance sector by client turnover and client number, 2004 263
Table 164: Brokers from sample with clients in the steel and other metals sector by client turnover and client number, 2004 264
Table 165: Brokers from sample with clients in the support services sector by client turnover and client number, 2004 265
Table 166: Brokers from sample with clients in the telecommunications services sector by client turnover and client number, 2004 266
Table 167: Brokers from sample with clients in the tobacco sector by client turnover and client number, 2004 266
Table 168: Brokers from sample with clients in the transport sector by client turnover and client number, 2004 267
Table 169: Brokers from sample with clients in the water sector by client turnover and client number, 2004 268
LIST OF FIGURES
Figure 1: The general insurance market continued to grow strongly in 2003 38
Figure 2: The commercial sector has consistently outpaced the personal sector since 2000 40
Figure 3: GWP of all commercial lines grew in 2003 42
Figure 4: Liability is leading the growth in commercial insurance 44
Figure 5: Brokers have remained the dominant distribution force in the commercial insurance market 46
Figure 6: Over 60 per cent of brokers are satisfied with their insurance provider 50
Figure 7: Good service levels are the best way of ensuring broker contentment 51
Figure 8: Brokers feel that an inexperienced front line is insurers’ biggest downfall 52
Figure 9: Service is the key to maintaining strong broker relationships 53
Figure 10: Commercial motor premiums are continuing to rise 54
Figure 11: Commercial property rates are starting to turn 55
Figure 12: Almost 80 per cent of brokers report liability rate increases 56
Figure 13: The majority of brokers still operate independently 57
Figure 14: A sense of community is the greatest benefit of joining a broker network 58
Figure 15: Independence is highly valued by brokers that do not belong to a network 59
Figure 16: Brokers’ stiffest competition comes from larger adversaries 60
Figure 17: The overwhelming majority of brokers have registered for FSA regulation 61
Figure 18: Closure or sale are the leading options for unregistered brokers 62
Figure 19: Opinions are divided over the ability of the FSA to handle brokers’ applications 63
Figure 20: One-third of brokers has employed an advisory firm 64
Figure 21: The most common view among brokers is that FSA regulation will cost up to 5 per cent of annual turnover 65
Figure 22: Reduction in the broker universe is on the cards 66
Figure 23: Brokers believe the commercial liability sector is on the verge of strong growth 67
Figure 24: Acquisitive brokers have tended to snap up between one and three of their competitors 68
Figure 25: Few brokers are planning on selling or closing, but almost a quarter are considering buying a competitor 69
Figure 26: Acquisition targets must demonstrate a breadth of experience and boast an impressive client base 70
Figure 27: There was a sharp rise in the number of UK enterprises in 2003 73
Figure 28: The overwhelming majority of companies has fewer than 50 employees 74
Figure 29: Customer segmentation in the commercial market 76
Figure 30: Large UK corporations are the most likely company segment to change insurance broker 78
Figure 31: Most customer switching occurs in the multinational and national broker segments 79
Figure 32: Of the top four brokers, Jardine Lloyd Thompson has been the most successful at acquiring new customers 81
Figure 33: Aon and Marsh lost a significant number of clients to their major competitors 82
Figure 34: The broker remains the favored route for SME’s insurance purchase decision 86
Figure 35: The phone is the primary medium for SMEs’ insurance arrangement 87
Figure 36: SMEs use a wide variety of providers for motor insurance 88
Figure 37: A number of providers lead the way in property insurance 89
Figure 38: A wide spread of insurers provides liability cover to SMEs 90
Figure 39: SMEs have sporadic face-to-face contact with their insurance provider 91
Figure 40: SMEs are most guided by price concerns 92
Figure 41: SMEs would favor the direct channel if it was available to them 93
Figure 42: SMEs perceive the direct channel as representing cost savings 94
Figure 43: Direct insurers may find it hard to dislodge SMEs’ current satisfaction with their broker 95
Figure 44: Norwich Union is the most recognized direct commercial provider among SMEs 96
Figure 45: SMEs are less enthralled by the prospect of purchasing insurance through their bank 97
Figure 46: Banks would appeal to SMEs as they are perceived to be a cheaper alternative to brokers 98
Figure 47: Broker satisfaction is also impeding the growth of banks and building societies channel, though SMEs also have concerns over cost 99
Figure 48: Barclays and NatWest are the leading banks for SMEs 100
Figure 49: Almost 55 per cent of brokers already do or would consider buying insurance by phone 101
Figure 50: The ease of using a telephone is its most attractive feature as a purchase medium 102
Figure 51: Broker satisfaction again precludes SMEs from using the telephone 103
Figure 52: There is some level of interest among SMEs in buying insurance online 104
Figure 53: Some SMEs believe the Internet is cheaper and is more convenient than using a broker 105
Figure 54: Aside from broker satisfaction, a number of SMEs do not trust the Internet sufficiently to use it as a purchase channel 106
Figure 55: SMEs have very high satisfaction levels with their insurance provider 107
Figure 56: SMEs tend not to have any difficulties fulfilling their commercial insurance requirements 108
Figure 57: SMEs’ key concern is that premiums are too expensive 109
Figure 58: SMEs value advice as part of their service proposition 110
Figure 59: SMEs place the highest value on financial and legal advice 111
Figure 60: SMEs are still experiencing rising motor rates 112
Figure 61: Property premiums continue to increase for SMEs 113
Figure 62: Almost 60 per cent of SMEs have seen their liability insurance premium increase 114
Figure 63: Premium hikes have a limited effect on SMEs’ business operations 115
Figure 64: SMEs’ loyalty to their insurance provider varies 116
Figure 65: Price is SMEs’ leading switching criterion 117
Figure 66: Price is likely to sway the most fickle SMEs to switch provider 118
Figure 67: Norwich Union is best placed to gain business from dissatisfied SMEs 119
Figure 68: A broker would be the natural choice for an SME changing insurance provider 120
Figure 69: SMEs are most likely to choose a new provider on the basis of a recommendation 121
Figure 70: Competition for business is most intense at the lower end of the market 125
Figure 71: Marsh, Aon and Willis dominate the market by client turnover 128
Figure 72: Aon has more clients than any other UK broker 130
Figure 73: Multinational brokers play a prominent role among clients with the highest turnover 132
Figure 74: Companies with a large number of employees are most likely to use one of the top 10 brokers 134
Figure 75: Self-insurance is most frequently practiced by companies with high turnovers and a large number of employees 144
Figure 76: Norwich Union allows businesses with up to five employees to obtain insurance quotes online 147
Figure 77: Assumptions underlying forecasts for commercial general insurance market distribution split 157
Figure 78: Multinational and superprovincial brokers are poised to increase their distribution market share 158
Figure 79: Datamonitor’s core consulting capabilities 275
Customers who bought this item also bought
UK Commercial Insurance Distribution 2006
UK Commercial Insurance Distribution 2009
Targeting SMEs in UK General Insurance 2008
UK Commercial Insurance Broker Survey
UK Commercial Insurance Distribution 2007
The Future Role Of Brokers In UK Personal General Insurance 2007
UK Commercial Property Insurance 2004
UK Commercial Insurance Distribution 2005
UK Commercial Insurance Broker Survey H2 2007
UK Commercial Insurance Broker Survey H1 2007
UK Commercial Insurance Broker Survey H1 2008
UK Commercial General Insurance 2004
|
|
|
|
