Gross written premiums in the commercial property
insurance category recorded sustained growth throughout the review period
(2008–2012), rising at a compound annual growth rate (CAGR) of 6.79%. Premiums
increased at an annual rate of 6.8% in 2012, reaching a total of GBP6.72 billion;
the highest level in five years.
Commercial property insurance claims paid declined by
5.5% in 2012, but this belies the rapid growth recorded since 2008. Payouts
rose at a CAGR of 57.29% over the five years to 2012, while claims incurred
increased at a CAGR of 28.61% during the same period. The UK has experienced
frequent flooding since 2000, including two of the wettest years on record
since 2008.
Despite weakness in the commercial construction market
and flagging business sentiment due to poor economic conditions, the rise in
premiums was driven by high claims related to severe weather and instances of
civil unrest. Tentative economic recovery and improving business conditions
drove growth towards the end of the review period.
A large claims burden, limited investment returns due
to the UK’s low interest rate environment, and rising expenses have hindered
the profitability of insurers in the category. A combined operating ratio of
111.8% was registered in 2012. Although it exceeds the 100% breakeven
threshold, it marks an improvement on profitability levels recorded during
2008−2010.
Following the expiry of the Statement of Principles in
June 2013, Flood Re was established by the government and the insurance
industry. Unlike its predecessor, Flood Re excludes small businesses from
guaranteed flood insurance at affordable prices, and will result in upward
pressure on costs and premiums for insurers and their commercial customers.
Despite downside forces, growth in commercial property
gross written premiums will prevail over the forecast period (2013–2017) as the
economic recovery gains traction, business confidence improves and commercial
construction activity increases. Premiums are expected to rise to GBP8.22
billion in 2017, representative of a CAGR of 4.34% over the five years from
2013.
- The report provides market analysis, information and insights into the UK commercial property insurance business
- It provides a snapshot of market's size and segmentation
- It offers a comprehensive analysis of claims, drivers and market outlook
- It analyzes distribution channels
- It details deals, news and regulatory developments
Scope
- This report provides market analysis, information and insights into the UK commercial property insurance business
- It provides a global snapshot of market size
- It analyses drivers and the outlook for the market
- It provides information on distribution channels
- It covers deals, news and regulatory developments
Reasons To Buy
- Gain an understanding of the UK commercial property insurance market size
- Learn about the performance of market drivers and distribution channels
- Understand the competitive landscape in terms of performance, profitability and product innovation
- Find out more on key deals and recent developments in the market
Key Highlights
- Premium growth was maintained in 2012
- Commercial property insurance payouts have surged
- High claims led insurers to raise rates
- Profitability has been elusive
- Insurers will face headwinds following legislative changes
- Moderate growth in gross written premiums is expected
Spanning
over 66 pages, 36 Tables and 22 Figures “Commercial
Property Insurance in the UK - Key Trends and Opportunities to 2017” report
provide Market Analysis, Competitive Landscape, Porter’s Five Forces Analysis,
Deals, News, Regulation and Compliance, Macroeconomic Backdrop, Company
Profiles, Statistics, Appendix and the report cover 10 companies - ACE European
Group Ltd, Allianz Insurance Plc, Aviva Plc, Axa UK Plc, FM Insurance Company
Ltd, Great Lakes Reinsurance (UK) Plc, QBE Insurance (Europe) Ltd, Royal and
Sun Alliance Insurance Plc, XL Group Plc, Zurich Insurance Plc.
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