UK Personal General Insurance 2011
Datamonitor, October 2011, Pages: 70
This report provides a detailed analysis of the UK personal general insurance market, including industry metrics such as GWP, combined operating ratio (COR), and distribution figures. The report starts with an overview of the UK general insurance market as well as the performance of the top 20 personal insurers in the UK. Forecasts for GWP are provided for each personal insurance line up to 2015.
Scope:
- Data on the size, structure and profitability of the total non-life market and the personal lines sector.
- Insight into the different methods of distributing personal lines insurance products and the changes in the landscape.
- Analysis of the total premiums and market share for the largest personal lines insurance groups.
Highlights:
- Underwriting cycles are visible in the insurance industry, 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 market underwriting profit/loss progressions.
- Direct insurers lost 2% of the personal lines insurance market and now account for 31% of the market. Brokers have grown their share of the personal insurance market for the sixth successive year.
- The total personal insurance market grew by 8.4% in 2010, although COR is still above profitable levels.
Reasons to buy:
- 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?
- How should my insurance company be structuring their personal lines policy book?
OVERVIEW
-Catalyst
-Summary
EXECUTIVE SUMMARY
-The UK non-life insurance market grew strongly throughout
?Most lines experienced strong gross written premium increases
-GWP in the personal lines market increased by 8.4% in
?Underwriting loss increased to £1.3bn in
-The top 10 insurers increased advertising expenditure in
?The top 10 personal insurance providers reduced advertising expenditure in
-Aggregators place a large emphasis on brand image
-The top 20 insurers account for just over 75% of the personal general insurance market
-Total personal insurance GWP is forecast to reach £31.8bn in
MARKET CONTEXT
-Introduction
-The UK non-life insurance market grew strongly throughout
?Most lines experienced strong gross written premium increases
?GWP increases have been strong across most lines
?The majority of the UK general insurance market is made up of ABI members
-The total general insurance market COR remained steady
?The underwriting cycle is becoming less volatile
?The average COR for commercial insurance increased slightly
-Insurers rebuilt reserves during
?Insurers put aside £890m to rebuild reserves over the year
-Trading results fell in
?Investment income is increasing as the economy recovers
?UK personal insurance makes up the majority of UK general insurance GWP
-GWP in the personal lines market increased by 8.4% in
-Personal insurance COR has risen every year since
?Underwriting loss increased to £1.3bn in
?The private motor market strengthened reserves dramatically in
DISTRIBUTION DYNAMICS
-Brokers have continued to grow their share of the distribution channel
?The broker channel has grown its share of the market for the sixth successive year
?Direct insurers lost market share in 2010 after a peak in
?Banks and building societies have steadily lost market share since
-The top 10 insurers increased advertising expenditure in
?The top 10 personal insurance providers reduced advertising expenditure in
?Royal Bank of Scotland Insurance providers Direct Line and Churchill had the largest advertising budgets in
?The AA and Saga both increased advertising expenditure in
?Aviva reduced its advertising expenditure in
-Aggregators place a large emphasis on brand image
-The TV and direct mail channels dominate advertising budgets
?The proportion of expenditure on television advertising grew in H1
?Expenditure on direct mail decreased in 2010 and H1
-Motor and household dominate advertising expenditure
?Motor insurance advertising accounted for 44.0% of the advertising expenditure in H1
?The top 10 advertisers spent 23.6% of their budget on household insurance advertisements
COMPETITIVE DYNAMICS
-Introduction
-The top 20 insurers account for just over 75% of the personal general insurance market
-The top 10 insurers increased GWP by 10.1% in
?Royal Bank of Scotland Insurance continues to dominate the personal insurance market
?Aviva's market share decreased in
?AXA experienced significant growth in its personal lines book in
?RSA became the fourth largest personal lines insurer in the UK in
?Lloyds Banking Group dropped two places after its sale of esure
?LV= increased GWP by 43.4% in
?Centrica has become the 10th largest personal insurance provider in the UK
-The top 11–20 insurers' market share grew by 6.7% in
?Zurich lost 12.0% market share in
?The Co-operative Insurance accounts for 2.0% of all personal lines GWP
?ACE reported strong growth in
-Centrica achieved the lowest COR in 2009 and
FUTURE DECODED
-Total personal insurance GWP is forecast to reach £31.8bn in
?Personal motor insurance will remain the largest personal insurance segment
-The private motor insurance market will continue to grow until 2015 due to rate increases
-Household GWP is forecast to grow slowly until
-The personal pecuniary loss market will be heavily impacted by payment protection insurance in
-The accident and health market is forecast to reach £7.4bn in
APPENDIX
-Definitions
?Premium income measures
?Distribution definitions
?Other
-Additional data
-Methodology
?Primary and secondary research
?Gross written premium and combined operating ratio estimates and forecast methodology
?Advertising and marketing spend data
-Further reading
-Ask the analyst
-Disclaimer
TABLES
-Table: UK annual GWP growth and COR for the general insurance market, 2000–
-Table: UK insurance, split by proportion of ABI members and Lloyd's of London
-Table: Total market COR (%), 2006–10
-Table: Accident year COR (%), 1996–2010
-Table: Underwriting result, investment income, and trading result as a percentage of NWP (worldwide business of UK insurers), 2000–
-Table: UK general insurance GWP by line (£m), 2006–10
-Table: GWP by product line (£m), 2006–10
-Table: COR in the personal insurance market by line (%), 2006–10
-Table: Underwriting result by line of personal business (£m), 2006–10
-Table: Reserve developments in the personal general insurance market by line (£000s), 2009–10
-Table: Personal general insurance distribution channels by GWP (%), 2006–10
-Table: Top 10 personal general insurance providers by advertising expenditure (£000s), 2009–H1 2011
-Table: Advertising expenditure of the top 10 insurance providers by platform (£000s), H1 2011
-Table: Aggregator advertising expenditure (£), H1 2011
-Table: Breakdown of aggregator advertising expenditure by channel (£), H1 2011
-Table: Personal general insurance advertising expenditure by platform (£000s), 2008–H1 2011
-Table: Advertising expenditure of the top 10 advertisers (£000s), 2008–H1 2011
-Table: Breakdown of personal lines GWP by market position (£000s), 2010
-Table: GWP of the top 10 personal insurers in the UK (£000s), 2009–10
-Table: GWP of the top 11–20 personal insurers in the UK (£000s), 2009–10
-Table: COR of the top 10 personal lines insurers in the UK (%), 2009–10
-Table: Forecast growth in personal insurance GWP (£m), 2010–15f
-Table: Breakdown of personal insurance GWP by line (£m), 2010–15f
-Table: Key variables affecting private motor insurance GWP, 2011f–15f
-Table: Forecast of private motor GWP (£m), 2010–15f
-Table: Key variables affecting household insurance GWP, 2011f–15f
-Table: Forecast of household GWP (£m), 2010–15f
-Table: Key variables affecting personal pecuniary loss GWP, 2011f–15f
-Table: Forecast of personal pecuniary loss GWP (£m), 2010–15f
-Table: Key variables affecting accident and health GWP, 2011f–15f
-Table: Forecast of accident and health GWP (£m), 2010–15f
-Table: Total UK pecuniary loss underwriting account (£m), 1998–2010
-Table: Total UK property underwriting account (£m), 1998–2010
-Table: Total UK household underwriting account (£m), 1998–2010
-Table: Total UK commercial property underwriting account (£m), 1998–2010
-Table: Total UK motor underwriting account (£m), 1998–2010
-Table: Total UK personal motor underwriting account (£m), 1998–2010
-Table: Total UK commercial motor underwriting account (£m), 1998–2010
-Table: Total UK liability underwriting account (£m), 1998–2010
-Table: Total UK accident and health underwriting account (£m), 1998–2010
FIGURES
-Figure: GWP in the personal insurance market rose by 8.4% in
-Figure: GWP in the personal insurance market will reach £31.8bn by
-Figure: GWP in 2010 grew strongly but COR remained high
-Figure: UK GWP grew across the board during
-Figure: ABI members made up 87.3% of the UK general insurance market in 2010
-Figure: Profit margins declined slightly for the total general insurance market in
-Figure: The commercial insurance COR worsened notably in 2010
-Figure: A rebuilding of reserves points towards a hardening market
-Figure: Investment income continued to improve in
-Figure: Personal insurance remains the largest non-life sector
-Figure: GWP in the personal insurance market rose by 8.4% in
-Figure: COR in the personal pecuniary loss market was the highest among all personal insurance lines
-Figure: The personal insurance market suffered an underwriting loss in
-Figure: The personal motor market increased reserves drastically in
-Figure: Brokers grew their personal insurance market share again in
-Figure: Direct insurers spent the most on advertising in H1
-Figure: Confused.com spent the most on general insurance advertising in H1
-Figure: TV and direct mail accounted for 80.6% of all general insurance advertising expenditure
-Figure: Motor insurance accounts for the majority of general insurance advertising expenditure
-Figure: The top 10 insurers control more than half of the GWP in the market
-Figure: RBSI was the largest personal insurer in the UK in
-Figure: The Co-operative Insurance is now the 13th largest personal lines insurer in the UK
-Figure: The average COR of the top 10 personal insurers increased in
-Figure: GWP in the personal insurance market will reach £31.8bn by
-Figure: Accident and health will grow its market share in the personal insurance market over the forecast period
-Figure: The private motor market is forecast to reach £11.3bn by
-Figure: Household GWP will reach £8.7bn by
-Figure: GWP in the personal pecuniary loss market will decrease in
-Figure: GWP in the accident and health market will grow to £7.4bn in
- Admiral Group plc
- AXA
- ERGO Versicherungsgruppe AG
- General Mills Inc.
- Hutchison 3G UK Limited
- Lloyd's of London
- National Westminster Bank Plc
- Nationwide Building Society
- RSA Insurance Group plc
- Simplyhealth
- Zurich Financial Services
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