Overview

Introduction

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.

Scope

• Insight into the market share and GWP of the top ten commercial property insurers
• A detailed comparison of the combined ratios of the top commercial property market insurers
• Analysis of the impact that new entrants and consolidation among broker has had on the competitive landscape

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.

Reasons to Purchase

• Benchmark your performance against other players in this increasingly competitive market
• Gain insight into the broker consolidation trend

• CHAPTER 1 INTRODUCTION
  • What is this brief about?
  • Who is the target reader?
• CHAPTER 2 COMPETITIVE DYNAMICS
  • Introduction
  • In 2005, nine of the top 10 commercial property insurers increased market share, as the market became more consolidated
    • Most top 10 commercial property insurers increased market share in 2005
      • Royal & SunAlliance gained the most commercial property market share in 2005
      • NIG increased premium income and market share
      • Ecclesiastical moved up the commercial property rankings in 2005
      • Allianz maintained its position despite an increase in premium income
      • Market leader Norwich Union continued to grow its commercial property insurance market share
      • St. Paul joined the top 10 commercial property insurers for the first time in 2005
      • Zurich increased its market share marginally
      • FM Insurance recovered market share in 2005
      • AXA retained its fourth place ranking
  • The commercial property market grew increasingly consolidated in 2005, while Lloyd' s and other non-ABI companies increased their share
    • The top 10 commercial market insurers gained market share at the expense of players outside the top 20
    • Lloyd' s and other non-ABI companies accounted for an increasing share of the property insurance market in 2005
  • The top 10 commercial property insurers experienced mixed results with their ratios in 2005, with St. Paul experiencing the lowest combined ratio
    • All top 10 commercial property insurers remain profitable even as soft market conditions have impacted combined ratios
  • Premium rates fell in the SME sector while a number of new underwriting agencies are targeting this market
    • Falling premium rates continued in 2006 as competitive pressures moved into SME lines
    • Three significant new start-up underwriting agencies entered the commercial insurance market in 2006, targeting the SME sector
      • Start-up ABC Insurance was bought by Liverpool Victoria
      • M4 Underwriting started writing business in June 2006, backed by Allianz
      • Start-up Arista Insurance will also target the SME market
  • Broker networks and consolidation among brokers continued to proliferate, while large insurers have bought into the distribution chain
    • Broker networks and consolidators stepped up activity in 2006
    • Insurers have sought to safeguard access to the market through broker acquisitions
• CHAPTER 3 APPENDIX
  • Methodology
    • 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
  • 2005 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
  • Current readings
  • Future readings
  • Do you need more information?
  • SPP writing team
  • List of Tables
    • Table 1: Market share of the top 10 commercial property insurers, 2001-5
    • 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
    • Table 3: Property GWP split between ABI members and Lloyd' s / Other, 1995-2005
    • Table 4: Combined ratios of the 10 largest commercial property insurers, 2005
  • List of Figures
    • Figure 1: Norwich Union was the largest commercial property insurer in 2005 with a market share of 18.4 per cent
    • Figure 2: Royal & SunAlliance gained 4 per cent of the UK commercial property insurance market in 2005
    • 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
    • Figure 4: The vast majority of property business remains with ABI companies but the amount written outside the company market has grown
    • Figure 5: All top 10 commercial property insurers were profitable in 2005