[Report] UK Personal General Insurance Market Research, Trends, Analysis TOC

DATAMONITOR VIEW
- CATALYST
- SUMMARY
ANALYSIS
- Introduction
- 2007 saw a number of mergers and acquisitions and job losses
  - AXA acquired Swiftcover in February 2007
  - Norwich Union and HSBC announced plans to create a joint venture in May 2007
  - Kwik-Fit launched The Green Insurance Company in August 2007
  - Groupama acquired a majority stake in Lark Group in August 2007
  - HBOS decided to merge Esure and First Alternative' s motor businesses in August 2007
  - Tesco launched its own price comparison website in September 2007
  - The AA and Saga merged in 2007
  - Equity Insurance Group recorded a high number of small-scale acquisitions
  - A number of insurers announced job cuts in 2007 to make cost savings
- The top 10 UK personal lines insurers showed mixed results in performance in 2006
  - Norwich Union' s personal lines book contracted slightly during 2006
  - Direct Line was the only personal lines RBSI subsidiary to achieve growth in 2006
    - Direct Line saw its personal lines book increase by 0.9% in 2006
    - UKI saw GWP for its personal lines business fall by 1.3% in 2006
    - Churchill saw the largest decrease in personal lines GWP of all the RBSI subsidiaries
  - AXA recorded strong growth across all its personal lines businesses in 2006
  - Royal & SunAlliance' s private motor book grew in 2006, but other personal lines did not fare well
  - St Andrews' s personal lines business grew as it recorded a large increase in household GWP in 2006
  - Zurich recorded GWP decline in all of its personal lines during 2006
  - BUPA witnessed a decline in its personal lines business during 2006
  - Fortis recorded strong GWP growth in the UK personal lines insurance market in 2006
  - Several of the leading UK personal insurers did not underwrite any commercial 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 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: Top 10 personal insurance competitors by GWP and market share, 2006
  - Table 2: Split between personal and commercial business for the top 10 personal 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, top 10 UK motor insurers, 2005-6
  - Table 7: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-6
  - Table 8: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-6
  - Table 9: Change in premium income compared to change in loss ratio for the top 10 UK pecuniary loss insurers, 2005-06
  - Table 10: Change in premium income compared to change in expense ratio for the top 10 UK pecuniary loss insurers, 2005-06
  - Table 11: Premium income compared to change in combined ratio for the top 10 UK pecuniary loss insurers, 2005-06
  - Table 12: Premium income compared to change in loss ratio for the top 10 UK property insurers, 2005-06
  - Table 13: Change in premium income compared to change in expense ratio among the top 10 property insurers, 2005-06
  - Table 14: Change in premium income compared to change in combined ratio for the top 10 UK property insurers, 2005-06
- List of Figures
  - Figure 1: Norwich Union was the largest UK personal general insurer in 2006, with a 15.8% market share
  - Figure 2: Several of the leading UK personal insurers did not underwrite any commercial business
  - 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: 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 7: Norwich Union saw the biggest increase in private motor expense ratio in 2006
  - Figure 8: NIG saw the biggest increase in combined ratio in 2006
  - Figure 9: 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 10: 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 11: Allianz, Direct Line and St Andrew' s achieved the strongest pecuniary loss combined ratio reductions in 2006, largely through decreasing their expense ratios
  - Figure 12: Direct Line, Zurich and Norwich Union saw the best decreases in loss ratio in 2006
  - Figure 13: 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 14: Direct Line and Churchill saw the biggest reductions in combined ratio in 2006

Competition in UK Personal General Insurance 2007

Table of Contents