Abstract
Introduction
This report provides information about the underwriting profitability of the top 10 UK motor insurers. It analyzes different performance measures, including loss, expense and combined ratios. In addition, it provides data on GWP for the top 10 motor insurers in 2006 and how this has changed since 2005.
Scope of this report
- Data on 2006 loss, expense and combined ratios for the leading UK motor insurers
- Insight into the underwriting efficiency of the top 10 UK motor insurers
- Information on motor insurance premium income changes for leading UK motor insurers in 2005 and 2006
Research and analysis highlights
Improving motor insurance market conditions were evident in 2006 as the average loss ratio of the top 10 motor insurers decreased by 3.3 percentage points, to 71.1%.
Average expense ratios among the leading UK motor insurers only changed modestly in 2006, declining by less than a percentage point, from 27.3% in 2005, to 26.7% in 2006.
The top 10 UK motor insurers recorded an average combined ratio of 97.8% in 2006 which represents a 4 percentage point decrease from 2005. Moreover this reduction moved the average from a position of underwriting loss into underwriting profit.
Key reasons to read this report
- Understand changes in average motor performance ratios
- Benchmark your performance ratios against those of major competitors
- Identify which motor insurers became more or less profitable in 2006
Table of Contents
- DATAMONITOR VIEW
- CATALYST
- SUMMARY
ANALYSIS
- 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
- In 2006, the average loss ratio of the top 10 UK motor insurers fell by 3.3 percentage points to 71.1%
- AXA, Norwich Union and Churchill recorded the strongest loss ratio reductions
- Four insurers recorded loss ratio deterioration
- 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
- The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006
- Churchill, AXA, NIG and Royal & SunAlliance recorded above-average expense ratio decline
- Norwich Union, Zurich and NFU Mutual recorded the highest increases in their expense ratios
- The average combined ratio of the top 10 motor insurers fell by four percentage points in 2006, with AXA and Churchill seeing significant declines
- The average combined ratio of the top 10 motor insurers declined by four percentage points in 2006
- AXA and Churchill recorded significant reductions in combined ratio in 2006
- NIG, Direct Line and Zurich recorded combined ratio increases
APPENDIX
- Definitions
- Average
- Total average
- Earned premiums
- Gross premium
- Net premium
- Written premiums
- Loss ratio
- Expense ratio
- Combined ratio
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
List of Tables
- Table 1: Change in premium income compared to change in loss ratio, top 10 UK motor insurers, 2005-6
- Table 2: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-6
- Table 3: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-6
- Table 4: Motor insurance premium income by competitor, top 20 UK motor insurers, 2005-6
- Table 5: Loss ratio of the top 20 UK motor insurers, 2005-6
- Table 6: Expense ratio for the top 20 UK motor insurers, 2005-6
- Table 7: Combined ratio for the top 20 UK motor insurers, 2005-6
List of Figures
- Figure 1: While the average loss ratio of the top 10 UK motor insurers fell in 2006, NIG and Direct Line saw increases in their ratios
- Figure 2: Norwich Union saw the biggest increase in private motor expense ratio in 2006
- Figure 3: NIG saw the biggest increase in combined ratio in 2006
