DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Introduction 2
A few new competitors entered the market in 2007 2
Direct Line entered the commercial market with an SME targeted proposition in 2007 2
LV's broker arm ABC Insurance launched its first products in 2007 with commercial motor policies to follow 2
Underwriting agency Arista rolled out multiple products for the commercial motor market in 2007 2
Many top 10 commercial motor insurers experienced shrinking books in 2006 3
The market remained highly concentrated despite the top 10 losing market share 3
The soft market led to a reduction in market share for four of the top 10 commercial motor insurers in 2006 4
Norwich Union continued to lose market share in 2006 4
Zurich experienced a contracting book in 2006, leading to a decline in its commercial motor market share 4
Allianz suffered a decline in its commercial motor market share in 2006 due to the competitive market 4
Brit's market share declined marginally as premium income fell by 3.4% 4
Four top 10 commercial motor insurers increased market share in 2006 5
NFU Mutual expanded its commercial motor book in 2006, leading to an increase of market share to 5.5% 5
QBE increased market share in 2006 by maintaining its premium income despite soft market conditions 5
AXA increased market share in 2006 by rebuilding its commercial motor book 5
NIG grew its market share by 0.4 percentage points in 2006 and achieved growth of 10.9% in GWP 5
Two competitors saw no change in market share in 2006 6
The market leader Royal & SunAlliance maintained its market share in 2006 at 18.2% 6
Highway pursued a more selective commercial motor strategy in 2006 that led to a decline in premium income 6
Mid-sized commercial motor insurers gained market share in 2006 9
The majority of insurers ranked 11-20 gained market share in 2006 9
Tradex and CIS lost market share in 2006, while St Paul and Ecclesiastical saw no changes 9
Tradex declined to 1.5% of the commercial motor market in 2006 9
CIS's market share in commercial motor declined in 2006 10
St Paul and Ecclesiastical's market share was unchanged in 2006 10
A majority of the top 10 have mixed motor insurance portfolios 12
Fleet premium income dominated the commercial motor books of the largest insurers in 2006 12
The top 10 commercial motor insurers are also active in the private motor market 14
Private motor dominates the books of the top 10 motor insurers 16
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 17
In 2006, the average loss ratio of the top 10 UK motor insurers fell by 3.3 percentage points to 71.1% 17
AXA, Norwich Union and Churchill recorded the strongest loss ratio reductions 17
Four insurers recorded loss ratio deterioration 18
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 20
The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006 20
Churchill, AXA, NIG and Royal & SunAlliance recorded above-average expense ratio decline 20
Norwich Union, Zurich and NFU Mutual recorded the highest increases in their expense ratios 21
The average combined ratio of the top 10 motor insurers fell by four percentage points in 2006, with AXA and Churchill seeing significant declines 23
The average combined ratio of the top 10 motor insurers declined by four percentage points in 2006 23
AXA and Churchill recorded significant reductions in combined ratio in 2006 24
NIG, Direct Line and Zurich recorded combined ratio increases 24
APPENDIX 27
Definitions 27
Premium income measures 27
Earned premiums 27
Gross Premium 27
Net Premium 27
Written premiums 27
Definitions of ABI terms 27
Brokers 27
National brokers 27
Other intermediaries & brokers 27
Chain brokers & telebrokers 27
Direct 28
Other company agents 28
Utilities/retailers/affinity groups 28
Company staff 28
Banks/building societies 28
SME 28
2005-06 definitions for line of business 28
Motor 28
Total private motor 28
Total commercial motor 29
Private motor comprehensive 29
Private motor non-comprehensive 29
Motorcycle 29
Fleets 30
Commercial vehicles (non-fleet) 30
Pre-2005 definitions for lines of business 30
Motor 30
Methodology 31
Primary and secondary research 31
Market size 31
Changes in market size information 31
Market size methodology 31
Lloyd's players and underwriting result figures 31
Competitor data 31
CIS 32
Home-foreign, overseas and facultative reinsurance business 32
Further reading 32
Ask the analyst 33
Datamonitor consulting 33
Disclaimer 33
List of Tables
Table 1: Market share of the market leader, the rest of the top 10 and the remainder, 1996, 2005, 2006 4
Table 2: Top 10 commercial motor insurers by market share, 2002-06 (%) 8
Table 3: Top 10 commercial motor insurers by premium income, 2002-06 (£000s) 8
Table 4: Commercial motor insurers ranked 11-20 by market share, 2002-06 (%) 11
Table 5: Premium income of commercial motor competitors ranked 11-20, 2002-06 (£000s) 12
Table 6: Top 10 commercial motor insurers' fleet and commercial vehicle shares of total GWP, 2006 (£000s) 14
Table 7: Split between commercial and private markets for the top 10 commercial motor insurers, 2006 (£000s) 15
Table 8: Top 10 motor insurers' GWP split by private and commercial, 2006 (£000s) 17
Table 9: Change in premium income compared to change in loss ratio, top 10 UK motor insurers, 2005-06 20
Table 10: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-06 23
Table 11: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-06 26
List of Figures
Figure 1: The top 10 commercial motor insurers have grown their share of the market since 1996 3
Figure 2: The top insurers retained a firm grip on the market in 2006 with a 76.3% market share 7
Figure 3: Mid-tier competitors accounted for 10.5% of the commercial motor market in 2006 10
Figure 4: Most of the top 10 commercial motor insurers' books are dominated by fleet business 13
Figure 5: Most of the top 10 commercial motor insurers also have a large presence in the private market 15
Figure 6: The top private insurers dominate the top motor rankings due to the size of their private books 16
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 19
Figure 8: Norwich Union saw the biggest increase in private motor expense ratio in 2006 22
Figure 9: NIG saw the biggest increase in combined ratio in 2006 25