Table of Contents

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Introduction 2
Two insurers exited the private motor market in 2006 and 2007 2
Provident sold its motor book to GMAC in May 2007 2
Legal & General ceased underwriting new private motor policies in 2006 2
The top 10 private motor insurers lost market share in 2006, although the market remained highly consolidated 2
Market leader RBSI maintained its grip on the private motor market in 2006 2
The top 10 private motor insurers lost market share in 2006 4
A number of the largest private motor insurers grew market share in 2006, despite competitive conditions 6
Direct Line's GWP remained stable in 2006 6
Royal & SunAlliance raised its market share and increased premium income in 2006 6
Fortis grew its private motor insurance market share in 2006 due to an increase in policy numbers 7
NIG grew its presence in the motor insurance market, gaining market share and GWP in 2006 7
Competitive conditions resulted in some top 10 players losing market share in 2006 7
The market leader, Norwich Union, lost the most market share of the top 10 in 2006 7
Churchill lost market share in 2006 as its non-comprehensive book contracted severely 7
Zurich's private motor GWP declined in 2006, leading to a contraction in market share 7
CIS's market share contracted in 2006 due to lower premium income 8
Two players, UKI and esure, saw no change in market share between 2005 and 2006 8
esure joined the top 10 private motor insurers despite decreasing private motor premium income 8
UKI saw its market share increase in 2006, though premium income declined 8
Mid-tier private motor insurers retained market share overall in 2006 9
Only a few private motor insurers in the 11-20 bracket managed to increase market share in 2006 9
AXA's private motor book rebounded in 2006 increasing by a substantial 43.5% in GWP terms 9
The NFU Mutual experienced modest premium income growth in 2006 10
Aioi Motor & General increased market share and premium income in 2006 10
Five mid-tier insurers lost market share in 2006 10
LV's market share declined by 0.3 percentage points in 2006 as it allowed premium income to contract 10
Provident's book continued to contract in 2006 as it sought to exit the UK private motor market 10
Groupama's private motor insurance book declined in 2006 10
HSBC experienced a decline in its private motor account in 2006 11
Allianz's GWP declined by more than 10% in 2006 11
Two mid-tier insurers saw minor declines in premium income but maintained market share in 2006 11
Highway's private motor book experienced a contraction in 2006, but maintained market share 11
MMA's market share remained stable although GWP reduced by 3.3% in 2006 11
Most of the top 10 insurers write some non-comprehensive and commercial business 14
Comprehensive premium income dominated the books of the largest private motor insurers 14
Six of the top 10 private motor insurers also write commercial motor insurance 16
The largest private motor insurers also tend to be the largest total motor insurers 18
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 19
In 2006, the average loss ratio of the top 10 UK motor insurers fell by 3.3 percentage points to 71.1% 19
AXA, Norwich Union and Churchill recorded the strongest loss ratio reductions 19
Four insurers recorded loss ratio deterioration 20
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 22
The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006 22
Churchill, AXA, NIG and Royal & SunAlliance recorded above-average expense ratio decline 22
Norwich Union, Zurich and NFU Mutual recorded the highest increases in their expense ratios 23
The average combined ratio of the top 10 motor insurers fell by four percentage points in 2006, with AXA and Churchill seeing significant declines 25
The average combined ratio of the top 10 motor insurers declined by four percentage points in 2006 25
AXA and Churchill recorded significant reductions in combined ratio in 2006 26
NIG, Direct Line and Zurich recorded combined ratio increases 26
APPENDIX 29
Definitions 29
Premium income measures 29
Earned premiums 29
Gross Premium 29
Net Premium 29
Written premiums 29
Other definitions 29
Channel 29
Direct insurer/writer 29
Brokers 29
Bancassurers 29
Brandassurers 30
Platform 30
2005-06 definitions for line of business 30
Motor 30
Total private motor 30
Total commercial motor 30
Private motor comprehensive 30
Private motor non-comprehensive 31
Motorcycle 31
Fleets 31
Commercial vehicles (non-fleet) 31
Pre-2005 definitions for lines of business 32
Motor 32
Methodology 32
Primary and secondary research 32
Market size 32
Changes in market size information 32
Market size methodology 33
Lloyd's players and underwriting result figures 33
Competitor data 33
CIS 33
GWP versus GEP reporting 34
Home-Foreign, overseas and facultative reinsurance business 34
Further reading 35
Ask the analyst 35
Datamonitor consulting 35
Disclaimer 35
List of Tables
Table 1: Top 10 UK private motor insurers' market share in 1996, 2005 and 2006 4
Table 2: Top 10 UK private motor insurers by market share, 2002-06 6
Table 3: Top 10 UK private motor insurers by premium income, 2002-06, (£000s) 9
Table 4: UK private motor insurers ranked 11-20 by market share, 2002-06 13
Table 5: UK private motor insurers ranked 11-20 by premium income, 2002-06, (£000s) 14
Table 6: Top 10 UK private motor insurers' comprehensive and non-comprehensive shares of total GWP, 2005-06, (£000s) 16
Table 7: Top 10 UK private motor insurers' GWP split by private and commercial, 2006, (£000s) 17
Table 8: Top 10 UK motor insurers' GWP split by private and commercial, 2006, (£000s) 19
Table 9: Change in premium income compared to change in loss ratio, top 10 UK motor insurers, 2005-06 22
Table 10: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-06 25
Table 11: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-06 28
List of Figures
Figure 1: The top 10 insurers controlled more of the market in 2006 than in 1996 3
Figure 2: Norwich Union remained the single largest insurer in the UK market in 2006 5
Figure 3: Insurers in the 11-20 segment showed very little difference in market share in 2006 12
Figure 4: None of the top 10 insurers wrote a substantial part of their business in the non-comprehensive market 15
Figure 5: Most of the top 10 UK private motor insurers also maintain a presence in the commercial market 17
Figure 6: The top 10 UK private insurers dominate the top motor rankings due to the size of their private books 18
Figure 7: While the average loss ratio of the top 10 UK motor insurers fell in 2006, NIG and Direct Line saw increases in their ratios 21
Figure 8: Norwich Union saw the biggest increase in private motor expense ratio in 2006 24
Figure 9: NIG saw the biggest increase in combined ratio in 2006 27