UK Personal General Insurance 2006 - Market Context

Table of Contents

• CHAPTER 1 INTRODUCTION
  • What is this report about?
  • Who is the target reader?
  • How to use this report
• 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
    • Personal lines outperformed the commercial sector, which suffered in 2005
    • Private motor was the only personal market that contracted in 2005
  • Please note, changes to FSA Returns mean that it is now possible to estimate the personal 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 and stagnation in the individual sector
    • Growth in the individual sector stagnated in 2005
    • Personal accident was largely behind the stagnation of the individual accident and health sector, as private medical insurance saw a resurgence of growth
    • The accident and health market recorded an underwriting profit for the sixth consecutive year in 2005, but profitability declined
  • The private and commercial 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 non-comprehensive sector drove the decline in the private motor market
    • The motor insurance market' s losses increased, as commercial motor' s meager profits failed to offset private motor' s rising losses
    • The private motor market' s underwriting losses mounted to £232 million
  • 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
  • Following a significant slowdown in 2004, the total property market went into decline in 2005 due to the performance of commercial property
    • The household insurance market fared much better than the commercial property market
    • 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 household insurance underwriting result rose in 2005, as growth in NWP outstripped total outgoings
• 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: Personal GWP split by line of business, 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: Total motor market GWP by private and commercial segment, 2001-5
    • Table 8: Motor market GWP by line of business, 2001-5
    • Table 9: Total motor underwriting account, 2001-5
    • Table 10: Private motor underwriting account, 1995-2005
    • Table 11: Pecuniary loss market GWP by line of business, 2001-5
    • Table 12: Pecuniary loss underwriting account, 2001-5
    • Table 13: Property insurance GWP split between household and commercial business, 2001-5
    • Table 14: Property underwriting account, 1995-2005
    • Table 15: Household underwriting account, 1995-2005
  • List of Figures
    • Figure 1: Soft market conditions were evident in many lines in 2005
    • Figure 2: The private motor market declined in 2005
    • Figure 3: While accident & health and household insurance have grown since 2001, the private motor market has stagnated
    • 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: Both private and commercial motor GWP continued to decline and have stagnated since 2001
    • Figure 9: The non-comprehensive sector leads the private motor market' s GWP decline
    • Figure 10: Motor underwriting loses increased in 2005
    • Figure 11: Private motor continued its slide into unprofitability in 2005, however, the current cycle is not as steep as previous cycles
    • Figure 12: Pecuniary loss is a profitable line, and the profit recorded in 2005 is near the record for the decade
    • Figure 13: Commercial property GWP declined in 2005, having slowed significantly in 2004
    • Figure 14: Profits fell slightly in 2005, as the effect of increased competition began to have an impact
    • Figure 15: The household insurance market recorded an impressive underwriting result in 2005