UK Commercial Property Insurance 2007 (Competitor Focus)

In 2006, the commercial property insurance market saw significant change in market share among the top 10 carriers. Furthermore, the profitability of each player varied considerably. This brief examines these developments in detail.

Report Highlights


The commercial property market became more consolidated in 2005 as the top 10 insurers gained market share at the expense of those with smaller exposures. Mid- market players, which are those ranked 11-20 in GWP terms, also recovered market share in 2005. The pace of broker consolidation picked up in 2006 as broker networks and consolidators grew in power and importance to insurers. This consolidation has introduced a great deal of uncertainty into the market for insurers.
[Studien Infos ausblenden]

CHAPTER 1 INTRODUCTION 8
What is this brief about? 8
Who is the target reader? 8
CHAPTER 2 COMPETITIVE DYNAMICS 9
Introduction 9
In 2005, nine of the top 10 commercial property insurers increased market share, as the market became more consolidated 9
Most top 10 commercial property insurers increased market share in 2005 9
Royal & SunAlliance gained the most commercial property market share in 2005 9
NIG increased premium income and market share 9
Ecclesiastical moved up the commercial property rankings in 2005 10
Allianz maintained its position despite an increase in premium income 10
Market leader Norwich Union continued to grow its commercial property insurance market share 10
St. Paul joined the top 10 commercial property insurers for the first time in 2005 10
Zurich increased its market share marginally 11
FM Insurance recovered market share in 2005 11
AXA retained its fourth place ranking 11
The commercial property market grew increasingly consolidated in 2005, while Lloyd's and other non-ABI companies increased their share 14
The top 10 commercial market insurers gained market share at the expense of players outside the top 20 14
Lloyd's and other non-ABI companies accounted for an increasing share of the property insurance market in 2005 16
The top 10 commercial property insurers experienced mixed results with their ratios in 2005, with St. Paul experiencing the lowest combined ratio 18
All top 10 commercial property insurers remain profitable even as soft market conditions have impacted combined ratios 18
Premium rates fell in the SME sector while a number of new underwriting agencies are targeting this market 21
Falling premium rates continued in 2006 as competitive pressures moved into SME lines 21
Three significant new start-up underwriting agencies entered the commercial insurance market in 2006, targeting the SME sector 21
Start-up ABC Insurance was bought by Liverpool Victoria 21
M4 Underwriting started writing business in June 2006, backed by Allianz 22
Start-up Arista Insurance will also target the SME market 22
Broker networks and consolidation among brokers continued to proliferate, while large insurers have bought into the distribution chain 22
Broker networks and consolidators stepped up activity in 2006 22
Insurers have sought to safeguard access to the market through broker acquisitions 23
CHAPTER 3 APPENDIX 24
Methodology 24
FSA Return changes 24
Major changes in FSA Return categories and their impact 24
Market size 25
Changes in market size information 25
Market size methodology 25
Lloyd's players and underwriting result figures 26
2005 definitions for lines of business 26
Accident & health 26
Medical expenses 26
HealthCare cash plan 26
Travel 27
Personal accident or sickness 27
Motor 27
Total private motor 27
Total commercial motor 27
Private motor comprehensive 27
Private motor non-comprehensive 28
Motorcycle 28
Fleets 29
Commercial vehicles (non-fleet) 29
Property 29
Total commercial property 30
Household and domestic all risks. 30
Consequential loss (i.e. business interruption) 30
Financial/Pecuniary loss business 30
Total personal financial loss business 31
Total commercial financial loss business 31
Legal expenses 31
Fidelity and contract guarantee 31
Liability business 31
Employers liability (including the employers liability part of mixed liability packages but excluding mixed commercial packages) 32
Professional indemnity (including directors' and officers' liability and errors and omissions liability) 32
Public and products liability 32
Mixed commercial package 32
Total personal 33
Total commercial 33
Pre-2005 definitions for lines of business 33
Accident and health 34
Individual accident and health 34
Group accident and health 34
General liability 35
Motor 35
Pecuniary loss 36
Total pecuniary loss figures 36
Property 36
Premium income measures 38
Earned premiums 38
Gross Premium 38
Net Premium 38
Written premiums 38
Current readings 38
Future readings 39
Do you need more information? 39
Datamonitor Financial Services Consulting 39
SPP writing team 41

[Inhaltsverzeichnis ausblenden]

Table 1: Market share of the top 10 commercial property insurers, 2001-5 14
Table 2: Market share of the top 10 commercial property insurers compared with those ranked 11-20 and those outside the top 20, 2001-5 16
Table 3: Property GWP split between ABI members and Lloyd's / Other, 1995-2005 18
Table 4: Combined ratios of the 10 largest commercial property insurers, 2005 20


Figure 1: Norwich Union was the largest commercial property insurer in 2005 with a market share of 18.4 per cent 12
Figure 2: Royal & SunAlliance gained 4 per cent of the UK commercial property insurance market in 2005 13
Figure 3: The top 10 insurers increased their share of the commercial property market in 2005 at the expense of insurers outside of the top 20 15
Figure 4: The vast majority of property business remains with ABI companies but the amount written outside the company market has grown 17
Figure 5: All top 10 commercial property insurers were profitable in 2005 20

[Tabellenverzeichnis ausblenden]