Performance Ratio Benchmarking in UK Motor Insurance 2007

• DATAMONITOR VIEW
• CATALYST
• SUMMARY

ANALYSIS

• 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

APPENDIX

• Definitions
• Average
• Total average
• Earned premiums
• Gross premium
• Net premium
• Written premiums
• Loss ratio
• Expense ratio
• Combined ratio
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

• Table 1: Change in premium income compared to change in loss ratio, top 10 UK motor insurers, 2005-6
• Table 2: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-6
• Table 3: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-6
• Table 4: Motor insurance premium income by competitor, top 20 UK motor insurers, 2005-6
• Table 5: Loss ratio of the top 20 UK motor insurers, 2005-6
• Table 6: Expense ratio for the top 20 UK motor insurers, 2005-6
• Table 7: Combined ratio for the top 20 UK motor insurers, 2005-6

• Figure 1: 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 2: Norwich Union saw the biggest increase in private motor expense ratio in 2006
• Figure 3: NIG saw the biggest increase in combined ratio in 2006