Table of Contents
- DATAMONITOR VIEW
- MARKET CONTEXT
- Introduction
- Despite falling GWP, the commercial property insurancemarket made a
respectable return in 2006
- GWP in the commercial property market continued to fall in2007
- Commercial property insurance remained profitable in 2006albeit at
lower levels
- Market expense and claims ratios showed little movement
- The claims ratio remained fairly static in 2006
- The expense ratio experienced the greatest movementbetween 2005 and
2006
- The underwriting ratio suffered a negligible deteriorationin 2006
- Commercial property claims costs soared in 2007 due to thesummer floods
- The summer floods effectively pushed weather-relatedclaims costs up
significantly in 2007
- Weather claims costs were much higher in 2007
- Business interruption costs following both fire andweather damage rose
in 2007
- The increase in the total cost of theft claims was mainlydriven by an
increase in the total number of claims
- The summer weather events were estimated to cost theindustry £3 billion
- The windstorm "Kyrill" left insurers with anestimated bill
of £350m
- Heavy rainfall in both June and July led to flooding invarious
locations across the UK costing the insurance industry anestimated £3
billion
- Insurers believe that commercial property fire regulationshould be
reformed
- Despite a blaze at a Cornish hotel, the number ofcommercial property
fires was down even though overall costs were not
- Insurers are alarmed over non-existent government measuresregarding
the prevention of warehouse fires
- The impact of fires on modern construction is not alwaysfully known
- FUTURE DECODED
- Introduction
- Under the neutral scenario the market makes anunderwriting profit
between 2008 and 2012
- The commercial property market moves into a loss as fiercecompetition
maintains downward pressure on premiums
- Datamonitor forecasts that after contracting in 2007, thecommercial
property market will grow to £5.4 billion in GWP by 2012
- The commercial property market experienced a largeunderwriting loss in
2007 but is forecast to make underwriting profitsfrom 2008 onwards
- The market remains unprofitable in our pessimisticscenario throughout
the forecast period
- The market experiences intense competition in 2007 andpressure
continues to be exerted on rates for longer than anticipated
- The market is expected to contract sharply again in 2008under this
pessimistic scenario
- The market is estimated to have made a large underwritingloss in 2007
and is forecast to remain unprofitable
- In the optimistic scenario, commercial property insuranceGWP increased
steadily between 2008 and 2012 and the market makes solidunderwriting profits
- After intense price competition in 2007, the market seesprices rise in
2008 and thereafter
- The commercial property insurance market experiencesstrong growth
after a dip in 2007
- The commercial property insurance market returns toprofitability in
2008
- APPENDIX
- Definitions
- ABI definitions
- Brokers
- National brokers
- Chain brokers & telebrokers
- Other intermediaries & brokers
- Direct
- Other company agents
- Utilities/retailers/affinity groups
- Company staff
- Banks/building societies
- Written premiums
- Gross premiums
- SynThesys Non-Life database definitions
- Total commercial property
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Commercial property insurance GWP, 2002-07e
- Table 2: Commercial property insurance underwritingaccount, 2002-06
- Table 3: Commercial property insurance claims, expenseand underwriting
ratios, 2002-06
- Table 4: Gross incurred commercial property claims byperil, 2003-07 (£m)
- Table 5: Weather-related claims costs for commercialproperty insurance,
2003-07 (£m)
- Table 6: Costs of business interruption claims by cause,2003-07 (£m)
- Table 7: Cost, volume and average value of commercialproperty theft
claims, 2003-07
- Table 8: Neutral scenario: Key variables affectingcommercial property
insurance GWP, 2007e-2012f
- Table 9: Neutral scenario: forecast GWP for thecommercial property
market, 2002-2012f
- Table 10: Neutral scenario: forecast underwriting resultfor commercial
property, 2002-12
- Table 11: Pessimistic scenario: Key variables affectingcommercial
property insurance GWP, 2007e-2012f
- Table 12: Pessimistic scenario: forecast GWP for thecommercial property
market, 2007e-2012f
- Table 13: Pessimistic scenario: forecast underwritingresult for the
commercial property insurance market, 2002-2012f
- Table 14: Optimistic scenario: Key variables affectingcommercial
property insurance GWP, 2007e-2012f
- Table 15: Optimistic scenario: forecast GWP growth,2007e-2012f
- Table 16: Optimistic scenario: forecast underwritingresult for the
commercial property market, 2002-2012f
- List of Figures
- Figure 1: The commercial property underwriting resultdecreased in 2006
- Figure 2: The commercial property insurance underwritingratio fell
slightly in 2006 as the expense ratio rose
- Figure 3: Weather claims costs increased significantlyin 2007, while
other costs remained fairly flat
- Figure 4: The cost of commercial propertyweather-related claims grew
significantly in 2007
- Figure 5: The surge in business interruption costs wasdriven by claims
following weather damage
- Figure 6: In 2007, the number of theft claims began toincrease, while
average value leveled off
- Figure 7: Under our neutral scenario, GWP declinesfurther in 2008 before
experiencing solid growth between 2009 and 2012
- Figure 8: Under our neutral scenario the market makes anunderwriting
profit between 2008 and 2012
- Figure 9: Under our pessimistic scenario, GWP grows lessthan 1% annually
between 2007 and 2012
- Figure 10: Under our pessimistic scenario the marketremains unprofitable
- Figure 11: Under our optimistic scenario, commercialproperty insurance
GWP is set to reach £6.1 billion in 2012
- Figure 12: Under our optimistic scenario the marketmakes strong profits
|
Related Report
|
View Cart
