Table of Contents
- DATAMONITOR VIEW
- ANALYSIS
- Introduction
- The market saw a number of mergers and acquisitions, many involving
brokers
- AXA acquired numerous commercial brokers in 2007, reinforcing its
position in the SME sector
- Groupama acquired a majority stake in Lark Group in August 2007
- Direct Line began to offer business insurance in 2007
- Equity Insurance Group recorded a large number of small-scale
acquisitions
- Towergate continued to acquire numerous brokers in 2007
- Other brokers acquiring included Jelf, Oval, Aon and JLT
- A number of insurers announced job cuts in 2007 in order to make cost
savings
- The largest three UK commercial insurers all recorded a decline in
commercial insurance GWP in 2006
- Royal & SunAlliance retained its position as the largest UK
commercial insurance provider in 2006
- Norwich Union recorded a fall of 3.3% in commercial insurance GWP
- Zurich saw premium income fall across all of its commercial books in
2006
- AXA recorded the highest increase in GWP of any top 10 UK commercial
insurer in 2006
- Allianz recorded a significant decline in commercial insurance GWP in
2006 as its commercial property book contracted
- New Hampshire recorded a 1.7% decline in commercial GWP in 2006
- BUPA suffered a 6.4% decline in GWP as conditions worsened in the
group accident and health market
- ACE recorded GWP growth of 2.6%
- NFU Mutual recorded a strong set of results in 2006, increasing
commercial motor, liability and property GWP
- NIG recorded the second highest GWP growth rate among the top 10 UK
commercial insurers
- Softening market conditions meant numerous insurers ranked between 11
and 20 saw GWP decline, although a handful saw GWP growth
- A number of insurers ranked between 11 and 20 saw GWP decline due to
the poor market conditions
- Groupama, Standard Life, Ecclesiastical and CNA saw commercial GWP
increase in 2006
- Most of the top 10 commercial insurers had a good mix of commercial
and personal business in 2006
- The profitability of the top 10 accident and health insurers
deteriorated in 2006 due to increases in loss ratios
- The top 10 accident and health insurers recorded an average loss ratio
of 63.7% in 2006, with the majority seeing an increase in their loss ratio
- The average loss ratio of 63.7% in 2006 was a 3.5 percentage point
increase from 2005
- Standard Life combined a growing book of business with a smaller
loss ratio
- Combined Insurance Company of America was the only top 10 accident
and health insurer to see a loss ratio reduction other than Standard Life
- Five insurers saw loss ratios increase at the same time as their
books grew
- New Hampshire and BUPA saw loss ratios increase while their books
declined in size
- The top 10 accident and health insurers recorded an average expense
ratio of 29.9% in 2006
- Three of the top 10 accident and health insurers saw their expense
ratios decrease while their books grew
- Combined Insurance Company of America saw its book shrink and its
expense ratios reduce
- Norwich Union, SimplyHealth and AXA saw expense ratios increase as
their books expanded
- Two insurers saw their expense ratios increase alongside a shrinking
book of business
- The top 10 accident and health insurers recorded an average combined
ratio of 93.6% in 2006, although two of the biggest players saw their
ratios move above 100%
- The top 10 accident and health insurers achieved an average combined
ratio of 93.6% in 2006
- Groupama and Standard Life both saw their combined ratios decrease
in 2006 and their books grow, but Groupama' s ratio remained above 100%
- Combined Insurance Company of America' s loss ratio fell by 5.8
percentage points
- Six of the top 10 insurers saw their combined ratios increase in 2006
- The performance of the top 10 liability insurers was mixed in 2006 with
some seeing better profits while a few players recorded significant losses
- The average loss ratio of the top 10 UK liability insurers rose by 9.7
percentage points in 2006, but Norwich Union and QBE recorded large
reductions
- The average loss ratio for the top 10 liability insurers rose by 9.7
percentage points in 2006
- Norwich Union and QBE saw the largest improvements in their loss
ratios
- Zurich saw the largest deterioration in its loss ratio in 2006
- The average expense ratio of the top 10 liability insurers increased
by 3.2 percentage points in 2006, with New Hampshire recording the largest
increase
- The average expense ratio rose by 3.2 percentage points in 2006 to
30.5%
- New Hampshire recorded the largest increase in its expense ratio but
remained one of the most efficient players
- Royal & SunAlliance, AXA and Allianz were the least efficient UK
liability insurers in 2006
- The average combined ratio of the top 10 UK liability insurers
increased in 2006, with Zurich and AXA seeing the two biggest increases
- The average combined ratio increased in 2006 by 12.9 percentage
points to 102.1%
- Norwich Union and QBE bucked the trend and recorded improvements in
their loss ratios
- Six of the top 10 UK liability insurers recorded combined ratios
below 100% in 2006
- Four insurers recorded combined ratios in excess of 100% in 2006
- The top 10 motor insurers made the move into profitability in 2006 on
the back of reductions in losses and expenses
- The average loss ratio among the top 10 UK motor insurance providers
declined in 2006 with AXA, Norwich Union and Churchill recording the
biggest improvements
- In 2006, the average loss ratio of the top 10 UK motor insurers fell
by 3.3 percentage points to 71.1%
- AXA, Norwich Union and Churchill recorded the strongest loss ratio
reductions
- Four insurers recorded loss ratio deterioration
- The average expense ratio of the top 10 UK motor insurers declined by
0.7 percentage points in 2006, with Churchill, AXA, NIG and Royal &
SunAlliance recording above-average reductions
- The average expense ratio of the top 10 UK motor insurers declined
by 0.7 percentage points in 2006
- Churchill, AXA, NIG and Royal & SunAlliance recorded
above-average expense ratio decline
- Norwich Union, Zurich and NFU Mutual recorded the highest increases
in their expense ratios
- The average combined ratio of the top 10 motor insurers fell by four
percentage points in 2006, with AXA and Churchill seeing significant
declines
- The average combined ratio of the top 10 motor insurers declined by
four percentage points in 2006
- AXA and Churchill recorded significant reductions in combined ratio
in 2006
- NIG, Direct Line and Zurich recorded combined ratio increases
- The top 10 pecuniary loss insurers saw their profitability increase
- Pecuniary loss combined ratios increased as expense ratios rose and
loss ratios fell
- The average loss ratio of the top 10 pecuniary loss insurers
declined by 0.2 percentage points to 29.4% in 2006
- Norwich Union and Lloyds TSB achieved strong loss ratio reductions
- Direct Line and Pinnacle recorded the highest loss ratio increases
- The average expense ratio of the top 10 pecuniary loss insurers
increased to 65.3% in 2006, with Direct Line, Allianz and St Andrew' s
seeing the highest individual increases
- The average expense ratio of the top 10 pecuniary loss insurers
increased by 1.8 percentage points to 65.3% in 2006
- GEFI, Norwich Union and UK Insurance recorded double-digit increases
in their expense ratios
- Direct Line, Allianz and St Andrew' s achieved strong expense ratio
reductions
- Combined ratios increased among the leading pecuniary loss insurers in
2006
- The average combined ratio among the top 10 pecuniary loss insurers
rose by 1.6 percentage points in 2006
- Allianz, Direct Line, St Andrew' s and Lloyds TSB reduced their
pecuniary loss combined ratios
- GEFI, UK Insurance and Pinnacle all experienced increases in their
combined ratios
- Combined ratios rose for the top 10 property insurers in 2006 due to
rising expenses and claims however most players remained in profitable
territory
- The average loss ratio of the top 10 property insurers increased by
0.1 percentage points in 2006, with Direct Line, Zurich and Norwich Union
recording the biggest reductions
- The average loss ratio of the top 10 property insurers increased by
0.1 percentage points
- Norwich Union, Direct Line and Zurich recorded strong loss ratio
reductions
- St Andrew' s, NIG and Royal & SunAlliance recorded high loss
ratio increases
- The average expense ratio of the top 10 property insurers increased in
2006, with Norwich Union and AXA recording the largest individual increases
- The average expense ratio of the top 10 property insurers rose by
1.4 percentage points in 2006
- Norwich Union, AXA and Lloyds TSB saw their expense ratios increase,
but they achieved GWP growth
- Four of the top 10 property insurers achieved expense ratio
reductions
- The average combined ratio of the top 10 property insurers rose in
2006, with Norwich Union, AXA and NIG seeing the largest increases
- Among the top 10 UK property insurers, the average combined ratio
rose by 1.5 percentage points in 2006
- Norwich Union, AXA and NIG recorded high combined ratio growth
- Three insurers were able to defy the property market trend and
reduce their combined ratios
- APPENDIX
- 2005-6 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
- 2005 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
- Competitor data
- GWP versus GEP reporting
- Total personal and total commercial business
- Home-Foreign, overseas and facultative reinsurance business
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: GWP of UK commercial insurers ranked 11-20, 2005-6
- Table 2: Split between commercial and personal business for the top 10
commercial insurers, 2006
- Table 3: Change in premium income compared to change in loss ratio for
the top 10 UK accident and health insurers, 2005-06
- Table 4: Change in premium income compared to change in expense ratio
for the top 10 UK accident and health insurers, 2005-06
- Table 5: Change in premium income compared to change in combined ratio
for the top 10 UK accident and health insurers, 2005-06
- Table 6: Change in premium income compared to change in loss ratio for
the top 10 UK liability insurers, 2005-06
- Table 7: Change in premium income compared to change in expense ratio
for the top 10 UK liability insurers, 2005-06
- Table 8: Change in premium income compared to change in combined ratio
for the top 10 UK liability insurers, 2005-06
- Table 9: Change in premium income compared to change in loss ratio,
top 10 UK motor insurers, 2005-6
- Table 10: Change in premium income compared to change in expense
ratio, top 10 UK motor insurers, 2005-6
- Table 11: Change in premium income compared to change in combined
ratio, top 10 UK motor insurers, 2005-6
- Table 12: Change in premium income compared to change in loss ratio
for the top 10 UK pecuniary loss insurers, 2005-06
- Table 13: Change in premium income compared to change in expense ratio
for the top 10 UK pecuniary loss insurers, 2005-06
- Table 14: Premium income compared to change in combined ratio for the
top 10 UK pecuniary loss insurers, 2005-06
- Table 15: Premium income compared to change in loss ratio for the top
10 UK property insurers, 2005-06
- Table 16: Change in premium income compared to change in expense ratio
among the top 10 property insurers, 2005-06
- Table 17: Change in premium income compared to change in combined
ratio for the top 10 UK property insurers, 2005-06
- List of Figures
- Figure 1: Groupama and Standard Life grew significantly on the back of
strong performances in the group accident and health market in 2006
- Figure 2: Royal & SunAlliance recorded the highest commercial GWP
in 2006, although Norwich Union was larger overall
- Figure 3: Only two of the top 10 UK accident and health insurers
achieved better loss ratios in 2006
- Figure 4: Numerous UK accident and health insurers saw their expense
ratios increase in 2006
- Figure 5: Six of the top 10 UK accident and health insurers recorded
higher combined ratios in 2006
- Figure 6: Norwich Union achieved the biggest reduction in its
liability loss ratio in 2006
- Figure 7: New Hampshire saw the largest increase in its expense ratio
in 2006
- Figure 8: Most of the top 10 UK liability insurers saw their combined
ratio deteriorate in 2006
- Figure 9: While the average loss ratio of the top 10 UK motor insurers
fell in 2006, NIG and Direct Line saw increases in their ratios
- Figure 10: Norwich Union saw the biggest increase in private motor
expense ratio in 2006
- Figure 11: NIG saw the biggest increase in combined ratio in 2006
- Figure 12: A number of UK pecuniary loss insurers recorded significant
GWP decline in 2006, although some were also able to decrease their loss
ratios as a result
- Figure 13: Direct Line achieved strong GWP growth and reduced its
expense ratio in 2006, although fellow RBS subsidiary UK Insurance did not
fare as well
- Figure 14: Allianz, Direct Line and St Andrew' s achieved the strongest
pecuniary loss combined ratio reductions in 2006, largely through
decreasing their expense ratios
- Figure 15: Direct Line, Zurich and Norwich Union saw the best
decreases in loss ratio in 2006
- Figure 16: St Andrew' s was the only insurer to successfully reduce its
expense ratio and at the same time increase its property insurance GWP in
2006
- Figure 17: Direct Line and Churchill saw the biggest reductions in
combined ratio in 2006
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