Table of Contents
- CHAPTER 1 INTRODUCTION
- What is this brief about?
- Who is the target reader?
- How to use this brief
- CHAPTER 2 MARKET CONTEXT
- Introduction
- Profits slipped in the UK general insurance market in 2005, as soft
market conditions took their toll on most lines of business
- Soft market conditions were evident in many lines of business in 2005
- The motor market led the decline with a reduction of 1.5 per cent
- Property and accident and health also went into decline
- Liability and pecuniary loss continued to improve
- The commercial market suffered more than the personal market in 2005
- Commercial property and commercial motor led the commercial GWP
contraction
- Please note, changes to FSA Returns mean that it is now possible to
estimate the commercial pecuniary loss market size. Please see the Appendix
for details.
- The general insurance market' s underwriting profit began to decline in
2005, as competition took its toll on most sectors
- The accident and health market declined in 2005, driven by a large fall
in accident sector premium income, in spite of robust growth in the group
health sector
- Group accident and health GWP increased, while the individual sector
stagnated
- The group health market drove the growth in the group accident and
health sector
- The accident and health market recorded an underwriting profit for the
sixth consecutive year in 2005, but profitability declined
- The proportion of the accident and health market written outside the
company market has increased as Lloyd' s and others have increased GWP,
while company players have decreased
- The liability market achieved marginal growth, and came very close to
achieving underwriting profitability in 2005
- Competition took its toll on the liability market, though increased
penetration rates in some lines secured marginal growth overall
- The liability market almost moved into a profit in 2005 due to strong
NWP growth
- Lloyd' s and non-company players decrease in market share, but maintain
a significant role in the liability market
- The commercial and private motor markets contracted in 2005 as soft
market conditions persisted
- Sustained high levels of competition and sliding premium rates led to
declines in GWP for both private and commercial motor
- The fleet market held up in 2005, while commercial vehicle recorded
the worst decline of any motor line
- The motor market' s underwriting losses increased in 2005 due to the
poor performance of the private sector
- The commercial motor market returned a much reduced underwriting
profit in 2005
- Lloyd' s insurers have continued to reduce exposure to the motor market
in 2005, a move pursued since 2001
- The pecuniary loss market grew rapidly in 2005 and although
profitability fell, it still returned a healthy underwriting result
- The pecuniary loss market was worth £5.5 billion in 2005
- Although the underwriting result dropped in 2005, pecuniary loss
remains a profitable line
- The market share and premium income of non-ABI companies and Lloyd' s
syndicates grew in 2005
- Following a significant slowdown in 2004, the property market went into
decline in 2005 due to the performance of commercial property
- The market' s overall decline resulted from a 7.5 per cent fall in
commercial property GWP
- Property underwriting profits fell slightly in 2005, as the effect of
increased competition began to have an impact
- Profitability declined as growth in total outgoings outstripped
growth in NWP
- The commercial property underwriting result fell by 38.6 per cent in
2005
- Lloyd' s and other non-ABI companies accounted for an increasing share
of the property insurance market in 2005
- CHAPTER 3 APPENDIX
- Methodology
- FSA Return changes
- Major changes in FSA Return categories and their impact
- Market size
- Changes in market size information
- Market size methodology
- Lloyd' s players and underwriting result figures
- 2005 definitions for lines of business
- Accident & health
- Medical expenses
- HealthCare cash plan
- Travel
- Personal accident or sickness
- Motor
- Total private motor
- Total commercial motor
- Private motor comprehensive
- Private motor non-comprehensive
- Motorcycle
- Fleets
- Commercial vehicles (non-fleet)
- Property
- Total commercial property
- Household and domestic all risks.
- Consequential loss (i.e. business interruption)
- Financial/Pecuniary loss business
- Total personal financial loss business
- Total commercial financial loss business
- Legal expenses
- Fidelity and contract guarantee
- Liability business
- Employers liability (including the employers liability part of mixed
liability packages but excluding mixed commercial packages)
- Professional indemnity (including directors' and officers' liability
and errors and omissions liability)
- Public and products liability
- Mixed commercial package
- Total personal
- Total commercial
- Pre-2005 definitions for lines of business
- Accident and health
- Individual accident and health
- Group accident and health
- General liability
- Motor
- Pecuniary loss
- Total pecuniary loss figures
- Property
- Premium income measures
- Earned premiums
- Gross Premium
- Net Premium
- Written premiums
- Current readings
- Future readings
- Do you need more information?
- SPP writing team
- List of Tables
- Table 1: Total general insurance GWP by line of business 2001-5
- Table 2: Commercial general insurance market GWP and year-on-year
growth, split by sector 2001-5
- Table 3: Total general insurance underwriting result, by line of
business, 1995-2005
- Table 4: Accident & health GWP split between individual and group,
2001-5
- Table 5: Accident and health GWP by sector, 2001-5
- Table 6: Total accident and health underwriting result, 1995-2005
- Table 7: Accident and Health market GWP split by UK company market
players and Lloyd' s/Non-company market, 1995-2005
- Table 8: General liability market GWP split by line of business, 2001-5
- Table 9: Total general liability underwriting result, 1995-2005
- Table 10: General liability GWP split between ABI members and Lloyd' s
/ Other, 1995-2005
- Table 11: Motor insurance GWP split between private and commercial
business, 2001-5
- Table 12: Commercial motor insurance GWP split by line, 2001-5
- Table 13: Total motor underwriting account, 2001-5
- Table 14: Commercial motor underwriting account, 1995-2005
- Table 15: Motor GWP split between ABI members, Lloyd' s / Other,
1995-2005
- Table 16: Pecuniary loss market GWP by line of business, 2001-5
- Table 17: Pecuniary loss underwriting account, 2001-5
- Table 18: Pecuniary loss GWP split between ABI members and Lloyd' s /
Other, 1995-2005
- Table 19: Property insurance GWP split between household and
commercial business, 2001-5
- Table 20: Property underwriting account, 1995-2005
- Table 21: Commercial property underwriting result, 1995-2005
- Table 22: Property GWP split between ABI members and Lloyd' s / Other,
1995-2005
- List of Figures
- Figure 1: Soft market conditions were evident in many lines in 2005
- Figure 2: The commercial market GWP declines or stagnates4
- Figure 3: In 2005, group accident and health grew faster than the
historical five year trend, while commercial property fell well below
- Figure 4: The underwriting profit of the general insurance market
deteriorated in 2005 as the market slipped off its peak
- Figure 5: The group accident and health sector picked up in 2005,
recording strong GWP growth
- Figure 6: Individual and group accident, and ' other' accident and
health business GWP fell in 2005
- Figure 7: The accident and health underwriting result declined in
2005, but the market still returned a comfortable profit
- Figure 8: Lloyd' s and other non-ABI companies win market share from
the company market and account for the accident and health market' s
expansion
- Figure 9: The liability market achieved moderate growth, in spite of a
decline in employers' liability
- Figure 10: The underwriting result for general liability has improved
sharply since 2001
- Figure 11: Company players won market share from Lloyd' s players as
the liability market saw little growth
- Figure 12: Both private and commercial motor GWP continued to decline
and have stagnated since 2001
- Figure 13: The performance of the commercial motor market' s sub
sectors diverged in 2005
- Figure 14: Motor underwriting losses increased in 2005
- Figure 15: Underwriting profits suffer in the commercial motor market
in 2005
- Figure 16: Lloyd' s has continued to reduce exposure to motor, with
some former Lloyd' s players writing from offshore locations accounting for
the increase in other
- Figure 17: Pecuniary loss is a profitable line, and the profit
recorded in 2005 is near the record for the decade
- Figure 18: The majority of pecuniary loss insurance is underwritten by
ABI members
- Figure 19: Commercial property GWP declined in 2005, having slowed
significantly in 2004
- Figure 20: Profits fell slightly in 2005, as the effect of increased
competition began to have an impact
- Figure 21: The commercial property insurance underwriting result fell
by over a third in 2005
- Figure 22: The vast majority of property business remains with ABI
companies but the amount written outside the company market has grown
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