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UK Commercial Motor Insurance 2011

UK Commercial Motor Insurance 2011

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Published by rob25ste
IntroductionThis report provides a comprehensive analysis of the UK commercial motor insurance market. It provides market data on the two main segments of the commercial motor market. The report includes insight into market sizing and profitability, key insurers in the market as well as current and future trends.Features and benefits* Gain insight into the size of the commercial motor insurance market* Discover the profitability of the top 10 insurers benchmarked against the market average* Summarizes the market activity of the top commercial motor insurers in the UK and breaks down their GWP in terms of fleet and commercial vehicle cover* In depth analysis of leading indicators using data from a variety of credible sourcesHighlightsConditions in the commercial motor insurance market remained difficult in 2010. The market did achieve an increase in GWP for the first increase since 2008. Profitability in the market decreased as the cost of claims increased in 2010The composition of the top 10 insurers has not changed since 2009, however there has been a change in rankings among these insurers. The market is still dominated by the top 10 insurers, which lends itself to larger rate increases.Forecasts show that the market will not return to profitability before 2013 as competition in the market remains high and rate increases have not been sufficient.Your key questions answered* How has the market size and profitability in the UK Commercial Motor Insurance marketplace changed in 2010'* What is the current market competitive landscape and how has it changed in 2010'* What will be the factors affecting the commercial motor marketplace going forward and when will it return to profitability'* Provides forecasts up to 2015 for both GWP and profitability in the market
IntroductionThis report provides a comprehensive analysis of the UK commercial motor insurance market. It provides market data on the two main segments of the commercial motor market. The report includes insight into market sizing and profitability, key insurers in the market as well as current and future trends.Features and benefits* Gain insight into the size of the commercial motor insurance market* Discover the profitability of the top 10 insurers benchmarked against the market average* Summarizes the market activity of the top commercial motor insurers in the UK and breaks down their GWP in terms of fleet and commercial vehicle cover* In depth analysis of leading indicators using data from a variety of credible sourcesHighlightsConditions in the commercial motor insurance market remained difficult in 2010. The market did achieve an increase in GWP for the first increase since 2008. Profitability in the market decreased as the cost of claims increased in 2010The composition of the top 10 insurers has not changed since 2009, however there has been a change in rankings among these insurers. The market is still dominated by the top 10 insurers, which lends itself to larger rate increases.Forecasts show that the market will not return to profitability before 2013 as competition in the market remains high and rate increases have not been sufficient.Your key questions answered* How has the market size and profitability in the UK Commercial Motor Insurance marketplace changed in 2010'* What is the current market competitive landscape and how has it changed in 2010'* What will be the factors affecting the commercial motor marketplace going forward and when will it return to profitability'* Provides forecasts up to 2015 for both GWP and profitability in the market

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Published by: rob25ste on Oct 29, 2011
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UK Commercial Motor Insurance 2011

Introduction This report provides a comprehensive analysis of the UK commercial motor insurance market. It provides market data on the two main segments of the commercial motor market. The report includes insight into market sizing and profitability, key insurers in the market as well as current and future trends. Features and benefits * Gain insight into the size of the commercial motor insurance market * Discover the profitability of the top 10 insurers benchmarked against the market average * Summarizes the market activity of the top commercial motor insurers in the UK and breaks down their GWP in terms of fleet and commercial vehicle cover * In depth analysis of leading indicators using data from a variety of credible sources Highlights Conditions in the commercial motor insurance market remained difficult in 2010. The market did achieve an increase in GWP for the first increase since 2008. Profitability in the market decreased as the cost of claims increased in 2010 The composition of the top 10 insurers has not changed since 2009, however there has been a change in rankings among these insurers. The market is still dominated by the top 10 insurers, which lends itself to larger rate increases. Forecasts show that the market will not return to profitability before 2013 as competition in the market remains high and rate increases have not been sufficient. Your key questions answered * How has the market size and profitability in the UK Commercial Motor Insurance marketplace changed in 2010' * What is the current market competitive landscape and how has it changed in 2010'

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UK Commercial Motor Insurance 2011

* What will be the factors affecting the commercial motor marketplace going forward and when will it return to profitability' * Provides forecasts up to 2015 for both GWP and profitability in the market

Table of Contents
Executive Summary Premiums increased in 2010 but challenges remain in the commercial motor marketplace GWP in the commercial motor marketplace experienced a marked increase for the first time since 2008 Commercial motor parc continues to decrease In 2010 the number of commercial vehicles decreased across all classes except "other vehicles" Average claims costs began to fall in 2010 The average claims cost decreased by 6.8% in 2010 Both the number and the cost of claims rose in 2010 Telematics provide the opportunity to reduce the cost of claims Distribution channels are expected to have stayed fairly constant in 2010 Brokers dominate distribution in the UK commercial market, with an 82% market share in terms of GWP The top 10 insurers have grown their share of the commercial insurance marketplace GWP will increase in 2011 as the market continues its drive towards profitability Rate increases are expected to continue increasing GWP in 2011 Insurers are only forecast to return to profitability by 2013 A combination of premium increases and cost-cutting measures will improve combined operating ratios going forward OVERVIEW Catalyst Summary MARKET CONTEXT

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UK Commercial Motor Insurance 2011

Introduction Premiums increased in 2010 but challenges remain in the commercial motor marketplace GWP in the commercial motor marketplace experienced a marked increase for the first time since 2008 The combined operating ratio in the commercial motor marketplace increased in 2010, despite a rise in premiums The loss ratio continues to be the main driver of the increasing COR Insurers have begun to rebuild reserve developments after a large decrease in 2009 Commercial motor parc continues to decrease In 2010 the number of commercial vehicles decreased across all classes except "other vehicles" Average claims costs began to fall in 2010 The average claims cost decreased by 6.8% in 2010 Both the number and the cost of claims rose in 2010 Accidental damage claims have the highest claimant success rate The number of road traffic accidents reported in the UK continues to fall The number of serious injuries and deaths due to RTAs continues to decrease Telematics provides opportunity to reduce the cost of claims DISTRIBUTION DYNAMICS Introduction SME commercial vehicle cover lends itself to online distribution Distribution channels are expected to have stayed fairly constant in 2010 Brokers dominate distribution in the UK commercial market, with 82% market share by GWP The proportion of policies written directly to insurers is expected to have increased by 1% Banks and building societies have only generated a small proportion of commercial insurance GWP Despite changes in technology, face-to-face brokerage is the most popular form of commercial insurance arrangement Nearly three quarters of SMEs arrange their commercial insurance via a broker Less than a quarter of commercial insurance policies are arranged through the Internet or by post Medium-sized enterprises are the least likely to stay with their provider for more than 10 years

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UK Commercial Motor Insurance 2011

Over a third of SMEs consider ongoing advice from their insurers to be "very important" SMEs that arranged their commercial insurance through the broker channel were most likely to deem ongoing insurance advice as "not important" Half of SMEs that arranged their commercial insurance by post found it "very important" to receive ongoing advice from their insurer Micro SMEs are the most concerned about price but the least concerned about service An increasing proportion of SMEs are open to telephone or online policy arrangement Call center-based insurance providers need to stress the convenience benefits they can offer Micro SMEs are more likely than medium firms to arrange commercial insurance over the telephone SMEs are attracted to the convenience of online commercial insurance arrangements Nearly two fifths of micro SMEs would arrange their insurance online The majority of SMEs that would not use the telephone or Internet retain the desire to arrange insurance face-to-face Three quarters of medium-sized companies would not purchase insurance over the telephone A clear majority of SMEs would prefer not to use the telephone to arrange insurance Insurers might find it easier to persuade SMEs to arrange their cover over the Internet rather than on the telephone Medium-sized enterprises were the most likely to reject the online arrangement platform in favor of the face-to-face method Almost two thirds of SMEs would arrange their cover online or via the telephone 31.3% of all SMEs interviewed stated that they would purchase motor insurance online Micro SMEs are most willing to arrange motor insurance online COMPETITOR FOCUS Introduction The top 10 insurers have grown their share of the commercial motor insurance marketplace Aviva and RSA both managed 10% rate increases in 2010 Aviva increased its GWP by 29.3% in 2010 RSA managed a 10% rate increase in commercial motor insurance Allianz aims at increasing commercial motor rates QBE calls for further rate increases in the commercial motor place

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UK Commercial Motor Insurance 2011

Aviva has become the largest fleet insurer in the UK Zurich experienced a 12% decrease in GWP in 2010 NFU Mutual grew GWP by 0.5% in 2010 AXA grew commercial motor insurance GWP by 9.9% in 2010 LV= gained a 1.2 percentage point increase in market share in 2010 RBS suffered the largest relative decrease in GWP in 2010 The top 11'20 insurers control a 9% market share The top 11'20 insurers lost 0.4% of their market share in 2010 RBS has the highest COR among the top insurers RBS's COR is 27.3% above the market average FUTURE DECODED Introduction GWP will increase to £5bn in 2015 as the market continues its drive towards profitability Rate increases are expected to continue increasing GWP in 2011 Insurers are only forecast to return to profitability by 2013 A combination of premium increases and cost-cutting measures will improve combined operating ratios going forward APPENDIX Definitions ABI members Accident year combined ratio Bancassurers Brokers Brandassurers Channel Direct insurer/writer Earned premiums Gross premium Net premium Platform Reported year combined ratio

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UK Commercial Motor Insurance 2011

Reserve development Written premiums Further reading Ask the analyst Datamonitor consulting Disclaimer

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