Commercial Non-Life Insurance Brokers in Southern and Western Europe

Table of Contents

0.0 EXECUTIVE SUMMARY

• Commercial non-life insurance premiums were worth an estimated € 78.3 billion across the region
• Brokers distribute over half of all commercial non-life insurance premiums everywhere except Spain
• Regulatory reforms may work against independent brokers in Spain and Portugal but help those in Italy while a move towards ' net quoting' is not expected to reduce brokers' market share
• Market concentration rises with brokers' share of commercial non-life insurance
• The recession is likely to mean that fewer, larger brokers control more of the market
• Market concentration is occurring through alliances, networks, acquisitions and consolidation
• Recessions can create opportunities for well-capitalized small and medium-sized brokers while underwriters also need to adjust their approach to suit new circumstances
• Should banks develop their own bancassurance channel or buy their way into broking?

1.0 INTRODUCTION

• Research rationale
• The reports offer the first comprehensive studies of a market worth € 10.4 billion a year
• Research methodology
• The reports are based on extensive use of both primary and secondary research sources
• Around 400 brokers have been researched across Southern and Western Europe
• Research definitions
• Acquisitions, groups and alliances
• Scope of commercial non-life insurance and brokers
• Finaccord

2.0 REGIONAL OVERVIEW

• Introduction
• Regulatory environment
• Registers of intermediaries have been created following the EU' s directive of 2002
• Nordic countries are moving to replace commission by fees
• Commercial non-life insurance in Southern and Western Europe
• Over a third of the growth in premiums between 2004 and 2008 came from France alone
• Portugal' s commercial non-life insurance market has most scope for long-term development
• The importance of property, motor and legal expenses insurance varies by sub-region
• Commercial non-life insurance brokers in Southern and Western Europe
• Brokers distribute over half of all commercial non-life insurance premiums in every country bar one
• The Netherlands overtakes Spain as the fourth-largest market in Southern and Western Europe
• Brokers in Belgium, Ireland and the UK are strong in personal lines as well, in contrast to Italy
• Independent brokers may suffer from legal changes in Spain and Portugal
• Market concentration rises with brokers' share of commercial non-life insurance
• Aon, Marsh and Willis make up two of the top three everywhere except Portugal
• Broker alliances and networks
• Brokerbility and COBRA use alliances to fuel growth
• International networks create cross-border scale
• Future outlook and market opportunities
• Could the recession cut supply even faster than demand?
• Fewer, larger brokers are forecast to distribute a larger share of the market after the recession with weak growth in revenues encouraging further mergers and acquisitions

3.0 BELGIUM

• Introduction
• Marine and transport insurance help brokers to dominate commercial non-life distribution
• Regulatory information
• Commercial non-life insurance in Belgium
• Legal expenses insurance is an important line of business in Belgium
• Commercial non-life insurance brokers in Belgium
• Brokers are well-established as the main distribution channel for non-life insurance
• Two brokers hold 40% of the market between them
• International capabilities are important in a country with many multi-national businesses
• Future outlook
• The underwriting cycle is forecast to run in the opposite direction to the economy

4.0 FRANCE

• Introduction
• The French commercial non-life market grew faster than Germany and the UK
• Regulatory information
• Commercial non-life insurance in France
• The rapid growth of construction insurance since 1998 is likely to go into reverse
• Commercial non-life insurance brokers in France
• The leading brokers generate over a quarter of their income from other lines of business
• The top three brokers control 40% of the market
• Brokers have differentiated themselves through specialisation
• Broker alliances
• Independent brokers have created substantial alliances
• Future outlook
• The downturn in the economy is co-inciding with a downturn in the underwriting cycle

5.0 IRELAND

• Introduction
• Shrinking revenues will force mergers between brokers
• Regulatory information
• Commercial non-life insurance in Ireland
• Premium income has been falling since 2004
• Commercial non-life insurance brokers in Ireland
• Brokers in Ireland have a larger share of this market than anywhere else in the region
• Almost half the market is controlled by the ' big three'
• Bank-owned brokers are noticeably absent in Ireland
• Future outlook
• Market concentration is likely to increase since broker revenues are forecast to fall

6.0 ITALY

• Introduction
• Brokers must look beyond commercial non-life insurance for growth opportunities
• Regulatory information
• Commercial non-life insurance in Italy
• Premium volumes have stagnated since 2004
• Commercial non-life insurance brokers in Italy
• Brokers focus on commercial non-life insurance in Italy, with little interest in personal lines or life
• The ' big three' hold half of the commercial non-life insurance market in Italy
• The broker market fragments by geography, client type and sector speciality
• Broker alliances
• Two major consortia aim to combine personal contact with economies of scale
• Future outlook
• The Bersani decree offers brokers more opportunities in personal than commercial lines

7.0 NETHERLANDS

• Introduction
• Commercial non-life insurance is only one product amongst many sold by financial intermediaries
• Regulatory information
• Commercial non-life insurance in the Netherlands
• The Dutch market is the largest in Europe compared to GDP, along with the UK
• Commercial non-life insurance brokers in the Netherlands
• Independent intermediaries usually distribute commercial non-life insurance as brokers not agents
• Acquisitions by international and national brokers have concentrated the market
• Future outlook
• Brokers are forecast to gain share from company salesforces rather than from agents

8.0 PORTUGAL

• Introduction
• Smaller brokers face a difficult future
• Regulatory information
• Commercial non-life insurance in Portugal
• Commercial non-life insurance is a small and stagnant market by premium volumes
• Commercial non-life insurance brokers in Portugal
• Brokers have little direct-to-consumer business in Portugal
• No single broker dominates the Portuguese market
• The owners of brokers include banks, industrial companies and automotive businesses
• Future outlook
• Smaller brokers are forecast to close as the economy falls and tied intermediaries rise

9.0 SPAIN

• Introduction
• New legislation has split bank-owned brokers apart from bancassurance agents
• Regulatory information
• Commercial non-life insurance in Spain
• Spain' s commercial non-life insurance market cease to grow in 2008 after years of expansion
• Commercial non-life insurance brokers in Spain
• Brokers distribute two-thirds of transport and legal expenses insurance
• Aon is the market leader by far, but there is a long ' tail'
• Over half the top 20 commercial non-life insurance brokers are subsidiaries
• Future outlook
• Bank-owned brokers are forecast to be the ' winners' by 2012

10.0 UNITED KINGDOM

• Introduction
• Many brokers are expanding by acquisition rather than by organic growth
• Regulatory information
• Commercial non-life insurance in the UK
• Growth in legal expenses and MAT insurance has been offset by a fall in liability cover
• Commercial non-life insurance brokers in the UK
• Revenue for brokers in the UK is almost equal to that of France, Germany and Italy combined
• The UK broker market is already relatively highly concentrated driven by a higher level of corporate activity in the broker sector than elsewhere in Europe
• Broker alliances
• Brokerbility and COBRA offer an alternative way to gain scale
• Future outlook
• Stagnation in total commercial non-life insurance revenues masks a dynamic competitor landscape

11.0 APPENDIX

• Sources

GRAPHICS / TABLES

• Size and growth of commercial non-life insurance market by country in Southern and Western Europe, 2004-8 16
• Comparison of size and growth of commercial non-life insurance premiums by country in Southern and Western Europe, 2004 and 2008 16
• Commercial non-life insurance premiums by country in Southern and Western Europe compared to total non-life premiums and GDP 18
• Commercial non-life insurance premiums in Southern and Western Europe compared to total non-life premiums and GDP 18
• Segmentation of commercial non-life insurance market by class of business in Southern and Western Europe 19
• Segmentation of commercial non-life insurance market by class of business in Southern and Western Europe 20
• Share of brokers of the commercial non-life insurance market by country in Southern and Western Europe 21
• Revenues from commercial non-life insurance broking by country in Southern and Western Europe 22
• Revenues from commercial non-life insurance broking by country in Southern and Western Europe (data) 23
• Market concentration of commercial non-life insurance broking by country in Southern and Western Europe 25
• Market concentration of commercial non-life insurance broking by country in Southern and Western Europe (data) 26
• Market shares of Aon, Marsh and Willis for commercial non-life broking revenues in Southern and Western Europe 27
• Market shares of Aon, Marsh and Willis for commercial non-life broking revenues by country in Southern and Western Europe (data) 28
• Forecasts for growth in brokers' revenue from commercial non-life insurance by country in Southern and Western Europe to 2012 33
• Forecasts for commercial non-life insurance premiums by country in Southern and Western Europe to 2012 (data) 34
• Size and growth of commercial non-life insurance market in Belgium, 2004-8 38
• Size and growth of commercial non-life insurance market in Belgium, 2004-8 (data) 38
• Segmentation of commercial non-life insurance market by class of business in Belgium 39
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in Belgium 40
• Market concentration for commercial non-life insurance broking in Belgium (data) 41
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in Belgium 42
• Top 20 commercial non-life insurance brokers in Belgium: number of employees and turnover 43
• Top 20 commercial non-life insurance brokers in Belgium: ownership, international partners and business specialities 44
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in Belgium to 2012 (data) 45
• Size and growth of commercial non-life insurance market in France, 2004-8 48
• Size and growth of commercial non-life insurance market in France, 2004-8 (data) 49
• Segmentation of commercial non-life insurance market by class of business in France 49
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in France 50
• Market concentration for commercial non-life insurance broking in France (data) 51
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in France 52
• Top 30 commercial non-life insurance brokers in France: number of employees and turnover 54
• Top 30 commercial non-life insurance brokers in France: ownership, international partners and business specialities 55
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in France to 2012 (data) 57
• Size and growth of commercial non-life insurance market in Ireland, 2004-8 60
• Size and growth of commercial non-life insurance market in Ireland, 2004-8 (data) 61
• Segmentation of commercial non-life insurance market by class of business in Ireland 61
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in Ireland 62
• Market concentration for commercial non-life insurance broking in Ireland (data) 63
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in Ireland 64
• Top ten commercial non-life insurance brokers in Ireland: number of employees and turnover 65
• Top ten commercial non-life insurance brokers in Ireland: ownership, international partners and business specialities 66
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in Ireland to 2012 (data) 67
• Size and growth of commercial non-life insurance market in Italy, 2004-8 70
• Size and growth of commercial non-life insurance market in Italy, 2004-8 (data) 71
• Segmentation of commercial non-life insurance market by class of business in Italy 71
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in Italy 73
• Market concentration for commercial non-life insurance broking in Italy (data) 74
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in Italy 74
• Top 30 commercial non-life insurance brokers in Italy: number of employees and turnover 75
• Top 30 commercial non-life insurance brokers in Italy: ownership, international partners and business specialities 76
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in Italy to 2012 (data) 78
• Size and growth of commercial non-life insurance market in the Netherlands, 2004-8 82
• Size and growth of commercial non-life insurance market in the Netherlands, 2004-8 (data) 83
• Segmentation of commercial non-life insurance market by class of business in the Netherlands 83
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in the Netherlands 85
• Market concentration for commercial non-life insurance broking in the Netherlands (data) 86
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in the Netherlands 86
• Top 25 commercial non-life insurance brokers in the Netherlands: number of employees and turnover 87
• Top 25 commercial non-life insurance brokers in the Netherlands: ownership, international partners and business specialities 88
• Turnover of broker subsidiaries of ING Assurantiekantoren 89
• Turnover of main broker subsidiaries of Unirobe Meeus 89
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in the Netherlands to 2012 (data) 91
• Size and growth of commercial non-life insurance market in Portugal, 2004-8 94
• Size and growth of commercial non-life insurance market in Portugal, 2004-8 (data) 95
• Segmentation of commercial non-life insurance market by class of business in Portugal 95
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in Portugal 96
• Market concentration for commercial non-life insurance broking in Portugal (data) 97
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in Portugal 98
• Top 20 commercial non-life insurance brokers in Portugal: number of employees and turnover 99
• Top 20 commercial non-life insurance brokers in Portugal: ownership, international partners and business specialities 100
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in Portugal to 2012 (data) 101
• Size and growth of commercial non-life insurance market in Spain, 2004-8 105
• Size and growth of commercial non-life insurance market in Spain, 2004-8 (data) 106
• Segmentation of commercial non-life insurance market by class of business in Spain 107
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in Spain 108
• Market concentration for commercial non-life insurance broking in Spain (data) 109
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in Spain 109
• Top 20 commercial non-life insurance brokers in Spain: number of employees and turnover 110
• Top 20 commercial non-life insurance brokers in Spain: ownership, international partners and business specialities 111
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in Spain to 2012 (data) 112
• Size and growth of commercial non-life insurance market in the UK, 2004-8 115
• Size and growth of commercial non-life insurance market in the UK, 2004-8 (data) 116
• Segmentation of commercial non-life insurance market by class of business in the UK 116
• Share of brokers of the commercial non-life insurance market and importance of commercial non-life insurance to leading brokers in the UK 117
• Market concentration for commercial non-life insurance broking in the UK (data) 118
• Market shares of commercial non-life insurance broking revenues of the top ten brokers in the UK 119
• Top 30 commercial non-life insurance brokers in the UK: number of employees and turnover 120
• Top 30 commercial non-life insurance brokers in the UK: ownership, international partners and business specialities 121
• Top 30 commercial non-life insurance brokers in the UK: ownership, international partners and business specialities (continued) 122
• Forecasts for commercial non-life insurance premiums, broker market share and broker revenues from commercial non-life insurance in the UK to 2012 (data) 124