UK Commercial Insurance Distribution 2017

  • ID: 4256761
  • Report
  • Region: United Kingdom, Great Britain
  • 51 pages
  • GlobalData
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  • AA
  • Aviva
  • Hiscox
  • Lloyds Bank
  • Saga
  • MORE
UK Commercial Insurance Distribution 2017


"UK Commercial Insurance Distribution 2017", report provides an in-depth study into the trends of commercial insurance distribution. The report discusses the influence of the differing purchasing behaviors of SMEs compared to larger corporate businesses, and pays particular attention to the role and strategies of brokers within product distribution. It also addresses the challenges in the market and the impact of technology on consumer channel preferences, before concluding with a distribution forecast for the coming years.

Commercial insurance remains a highly competitive market, and the distribution of its products continues to evolve and vary. Brokers hold the highest share of the commercial market despite incremental growth in the other channels. The SME market has been driving this change, with more of these types of businesses opting to purchase insurance directly from their provider. These SMEs require less comprehensive insurance coverage, meaning a more simplistic and efficient offering is adequate.

- Brokers dominate the distribution of commercial insurance with a 77.1% share of the market.
- Brokers of all capacities are keen to improve their online propositions to provide an enhanced level of customer service.
- Underinsurance is a problem within the SME space, with significant proportions citing price and a general lack of knowledge or product awareness as the reasons for forgoing adequate insurance cover.

Reasons to buy
- Adapt your distribution strategy to ensure it still meets the needs of clients and intermediaries.
- Ensure you remain competitive as new innovations revolutionize the purchasing journey for clients and brokers.
- Benchmark yourself against other players in the market.
- Be prepared for how technology is set to impact the commercial insurance market.
Note: Product cover images may vary from those shown
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  • AA
  • Aviva
  • Hiscox
  • Lloyds Bank
  • Saga
  • MORE
1.1. Brokers dominate as the direct channel increases its share
1.2. Key findings
1.3. Critical success factors
2.1.1. Introduction
2.2. Brokers still dominate despite a continuing dip in share
2.2.1. The need for specialist advice keeps brokers at the top
2.2.2. Brokers continue to see their distribution shares slip for more simple products
2.3. SMEs look to channels other than brokers for their insurance
2.3.1. The online channel serves SMEs well for commoditized commercial products
2.3.2. The direct channel competes against brokers within the SME space
2.3.3. Banks and aggregators have grown their channel shares in most business segments
2.4. Commercial insurance distribution within the direct channel
2.4.1. Insurers continue to grow their direct propositions
2.4.2. A select few commercial insurers offer a direct proposition
2.4.3. Aviva’s Digital First initiative targets customers choosing the online channel
2.4.4. Hiscox’s continued investment in its online infrastructure is proving a success
2.5. Retailers and affinity groups and commercial insurance
2.5.1. Affinity providers target SMEs with more commercial insurance products
2.5.2. Direct propositions are limiting aggregator usage in the commercial space
2.5.3. and are preferred by SMEs
2.6. Banking providers and the distribution of commercial insurance
2.6.1. Banks and building societies are used the least to purchase commercial policies
3.1. The broker landscape is dominated by five global firms
3.2. Global brokers retain the largest share of commercial revenues
3.2.1. The top five brokers accounted for around 45% of the total market in 2016
3.2.2. JLT ranked first for a second year running
3.2.3. Marsh is set to continue its aggressive expansion strategy
3.2.4. Aon aims to grow its UK national business
3.2.5. Arthur J. Gallagher climbs to fourth as its series of acquisitions pays dividends
3.2.6. Willis looks to Towers Watson merger to improve financial performance
3.3. The growth strategies of brokers are largely similar
3.3.1. Brokers are looking to facilitate growth through cross-selling and upselling
3.3.2. National brokers have acquisitions high on the agenda
3.3.3. Brokers are warming to the use of social media
3.3.4. Provincials keep with tradition but are considering developing their online channels
3.3.5. The super-regionals are prioritizing social media engagement
3.3.6. National brokers are looking to enhance their online propositions
4.1. Is disruption causing more difficulties than benefits?
4.1.1. E-trading disruption tool is set to enhance broker functionalities
4.1.2. Commercial lines carriers are set to benefit from the introduction of blockchain
4.1.3. The advice gap could be leaving SMEs underinsured
4.2. How will the distribution landscape alter in the coming years?
4.2.1. Growth in the commercial market will stem from SME insurance
4.2.2. Continued growth of the direct channel will cause brokers to lose more share
4.2.3. Micro firms account for the most GWP handled in the SME market
4.2.4. The future of commercial distribution depends on developments in the SME market
5.1. Abbreviations and acronyms
5.2. Definitions
5.2.1. Brokers
5.2.2. Direct
5.2.3. SME
5.3. Methodology
5.3.1. Primary sources
5.4. Bibliography
5.5. Further reading

List of Tables
Table 1: The top five direct insurers (percentage of SME respondents), 2016
Table 2: Broker business growth strategies, 2017
Table 3: Broker business growth strategies, percentage point movement, 2016-17
Table 4: Share of commercial insurance distribution by channel (%), 2015-21f

List of Figures
Figure 1: Brokers retain their dominance but continue to lose market share
Figure 2: The internet is the most popular method used by SMEs to purchase insurance cover
Figure 3: The direct channel is catching up to brokers in the micro enterprise space
Figure 4: The direct channel has recovered from a decline in 2014
Figure 5: The direct channel is estimated to have reached £1.67bn in GWP in 2016
Figure 6: Retailers and affinity groups are slowly growing their share of the commercial insurance market
Figure 7: 2015 saw the retailer and affinity channel surpass £0.5bn in commercial insurance GWP
Figure 8: The banking channel accounts for a tiny proportion of commercial insurance distribution
Figure 9: 2016 saw commercial insurance GWP marginally decline in the banking channel
Figure 10: JLT retained its place as the UK’s largest broker in 2016
Figure 11: Brokers are looking to grow by cross-selling and upselling
Figure 12: National brokers are largely in favor of acquisitions as a strategy for business growth
Figure 13: Super-regional brokers are the heaviest users of social media
Figure 14: Provincial brokers have adopted features associated with traditional insurance broking
Figure 15: Super-regional brokers have the highest adoption of social media use to engage clients
Figure 16: National brokers are looking to improve on their use of social media as an engagement tool
Figure 17: Payment functions enabled by blockchain technology
Figure 18: Continued growth in the commercial market is forecast over the coming years
Figure 19: Brokers will lose distribution share of commercial insurance products in the years to come
Note: Product cover images may vary from those shown
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  • AXA
  • Direct Line
  • Hiscox
  • NFU Mutual
  • Aviva
  • Allianz
  • Simply Business
  • Towergate
  • Barclays
  • Lloyds Bank
  • Arthur J. Gallagher
  • JLT
  • Marsh
  • Aon
  • Willis
  • AA
  • Saga
  • Thistle Insurance Services
  • Tower Watson
  • Jelf
  • Insurance Times
  • Willis Tower Watson
  • Giles
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown