UK Commercial Property Insurance 2010

Date: January 1, 2011
Pages: 49
Price:
US$ 2,795.00
Publisher: Datamonitor
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: UCD47BE44A4EN
Leaflet:

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UK Commercial Property Insurance 2010
Introduction

This report provides a detailed analysis of the UK commercial property insurance market. It looks at the size of the market, performance ratios, claims costs, key issues and distribution trends. It also assesses the competitive landscape providing market share information and forecasts the total market GWP up to and including 2014.

Features and benefits
  • An examination of overall market size, growth and profitability over the last several years
  • Analysis of the key drivers of claims inflation using ABI figures for 2009 and H1 2010
  • Market share and combined ratio data for the largest commercial property insurers
  • Forecasts of the market’s GWP growth until 2014, based on primary interview, secondary research and in-house expertise
Highlights

Businesses have increasingly incorporated more technology and expensive equipment as standard, resulting in the rise of average value of claims over the past few years, as the potential "loss per square foot" for a property is said to increase.

Premium rates are not expected to increase adequately in the near term, and due to the volume of reserve releases over the past few years, it is suspected that the level of reserves held by commercial property insurers is depleting.

In 2009, RSA is estimated to have witnessed growth in its UK commercial property insurance gross written premiums (GWP) of 3.1%, resulting in a 0.6 percentage point increase in market share to 14.4%. This is in comparison to a drop in market share as experienced by most of the other top commercial property insurers.

Your key questions answered
  • How has the commercial property insurance market been faring recently and how is it forecast to perform in the next four years?
  • How are the various commercial property insurers performing in terms of GWP and combined operating ratios?
  • What is the size and profitability of the total market, and how is this expected to change in the future?
Overview
Catalyst
Summary
Executive Summary
The market contracted in 2009 due to high competition
Commercial property insurance witnessed an improving combined operating ratio in 2009
The first half of 2010 displayed an increased claims cost bill
RSA has overtaken Aviva as the leading insurer for commercial property
AXA and Allianz retained their top five market positions
Brit Insurance and QBE displayed sizable increases in GWP in 2009
The market is forecast to remain soft at least into 2011
Market Context
Introduction
The market contracted in 2009 due to high competition
Commercial property insurance witnessed an improving combined operating ratio in 2009
The first half of 2010 displayed an increased claims cost bill
Construction and policy changes over the next few years will apply upward pressure on claims costs
Distribution
Introduction
National brokers arrange half the UK commercial insurance policies
Competitive Dynamics
Introduction
RSA has overtaken Aviva as the leading insurer for commercial property
AXA and Allianz retained their top five market positions
Brit Insurance and QBE displayed sizable increases in GWP in 2009
Future Decoded
Introduction
The market is forecast to remain soft at least into 2011

APPENDIX

Definitions
Methodology
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer

TABLE OF FIGURES

Figure 1: The commercial property insurance market saw a diminished underwriting profit in 2009
Figure 2: The commercial property insurance market has been contracting since 2005
Figure 3: Real growth has been negative in the competitive market since 2005
Figure 4: The commercial property insurance market saw a diminished underwriting profit in 2009
Figure 5: The total property COR has been improving at a faster rate than for commercial property
Figure 6: The level of reserve releases increased significantly in 2009
Figure 7: Fire-incurred claims cost insurers less in H1 2010 than H1 2009
Figure 8: Escape of water claims have been increasing since at least 2004
Figure 9: In 2009, escape of water claims became more prominent than those for business interruption
Figure 10: The total weather claims cost decreased slightly in 2009
Figure 11: The total cost of business interruption claims fell significantly in 2009
Figure 12: Total cost of commercial property insurance theft claims (£m), 2004–09
Figure 13: The average value of theft claims rose in 2009 while the number of incidences fell
Figure 14: Over four fifths of commercial property insurance policies are arranged via brokers
Figure 15: Around three quarters of small and medium enterprises purchased their commercial insurance through brokers
Figure 16: Two-fifths of SMEs would consider online insurance arrangement
Figure 17: Top 10 competitors' market share/change
Figure 18: Chartis, Allchurches, Allianz, and the RBS group made an underwriting profit in 2009
Figure 19: Total commercial property insurance GWP (£m), 2002–14f
Figure 20: The combined operating ratio is forecast is increase in 2010 before declining toward the end of the forecast period

TABLE OF TABLES

Table 1: Total commercial property insurance GWP, 2002–09
Table 2: Commercial property premium real growth rates and average inflation (%), 2003–09
Table 3: Commercial property insurance costs and underwriting results, 1999 - 2009
Table 4: Accident year CORs for commercial and total property insurance (%), 2005-09
Table 5: Accident and reported year COR, underwriting results, and reserve developments in the commercial property insurance market (%), 2005–09
Table 6: Gross incurred commercial property insurance claims, by peril (£m), H1 2009–H1 2010
Table 7: Gross incurred commercial property insurance claims, by peril (£m), 2004–09
Table 8: Proportion of gross incurred commercial property insurance claims, by peril (%), 2004–09
Table 9: Commercial property insurance weather claims (£m), 2004–09
Table 10: Cost of business interruption claims, by cause (£m), 2004–09
Table 11: Total cost of commercial property insurance theft claims (£m), 2004–09
Table 12: Number and average value of commercial property insurance theft claims, 2004–09
Table 13: Share of distribution channels in the commercial general insurance market (%), 2004–09
Table 14: Insurers offering UK commercial property insurance
Table 15: GWP and market share of the top 10 UK commercial property insurance groups, 2008–09
Table 16: Reported year combined ratios and underwriting profit/loss for the top 10 commercial property insurance groups, 2009
Table 17: Key variables affecting GWP, 2009–14f
Table 18: Forecast of UK commercial property insurance market GWP, 2010–14f
Table 19: Forecast of accident year combined operating ratio in the commercial property insurance market (%), 2010–14f

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UK Commercial Property Insurance 2010
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