Dallas, TX: ReportsandReports announce it will carry UK Commercial Insurance Distribution 2010 Market Research Report in its Store.
Browse complete UK Commercial Insurance Distribution 2010 Report
Introduction
This report gives a comprehensive analysis of distribution in the UK commercial insurance market. It explores issues including the growth of direct insurers in commercial insurance and the acquisitions occurring between commercial insurance brokers. The report also includes data and insight on SMEs’ purchasing behavior, broker consolidation and the latest activity of the managing general agents.
Scope
- Insight into the latest issues affecting the commercial insurance market and the impact these are having on distribution.
- The latest data on SMEs’ purchasing behavior, managing general agents and broker consolidation in the UK commercial insurance market.
- The latest data on the size of the commercial insurance market and GWP splits by distribution channel.
- Forecasts up to 2014 of the market share of different channels in the UK commercial insurance space.
Highlights
SMEs have been generally loyal to their commercial insurance providers, most commonly maintaining the relationship for two to five years. However, SMEs were perhaps expectedly motivated to stay or leave their provider according to price, implying a high level of potential churn in that sector.
For the past year, broker networks have continued to acquire regional brokers in a bid to increase their market share and improve their regional coverage. According to Datamonitor’s commercial insurance broker survey, 45.7% of commercial brokers are part of a broker network or club.
A number of insurers withdrew capacity from managing general agents (MGAs) in H1 2009 but the total number of MGAs is set to increase. The cost efficiency and penetration into niche markets are benefits many insurers are keen to exploit and as such major players such as Giles have been forming new MGAs.
Reasons to Purchase
- Understand issues affecting the commercial insurance market such as the promiscuity of SMEs, potential growth of MGAs and channel preferences.
- Understand the future level of consolidation in the sector and the companies which are most likely to drive this consolidation.
- Gain insight into the prevalent broker network model, factors driving the model and why the direct and affinity channels are of increasing importance.
Table of Content
Overview
Catalyst
Summary
Executive Summary
Total general insurance GWP declined in 2006
Brokers continued to dominate the distribution of commercial insurance
National brokers have lost distribution market share to the direct channel, chain brokers and telebrokers
Larger companies are more likely to have switched brokers between 2006 and 2007
Companies with a large turnover are more likely to switch broker
The market saw a number of mergers and acquisitions, many involving brokers
The broker channel is dominant in UK commercial insurance distribution, however its share of the market is declining
Brokers are forecast to see a 1% decline in market share between 2007 and 2011
Table of Contents
Table of figures
Table of tables
Introduction
What is this report about?
Who is the target reader?
How to use this report?
Market Context
Introduction
Total general insurance GWP declined in 2006
The motor insurance market recorded its fourth consecutive year of decline
Property insurance GWP rose very slightly in 2006
General liability recorded a significant fall in GWP
Accident and health was the only business line to record strong growth
Pecuniary loss GWP fell by 3.2%
The general liability, commercial property, commercial motor and pecuniary loss markets recorded a fall in GWP in 2006
The UK business parc is continuing to grow steadily with most of the impetus coming from the smallest firms
The majority of UK businesses have no employees
Distribution Dynamics
Introduction
Brokers continued to dominate the distribution of commercial insurance
National brokers have lost distribution market share to the direct channel, chain brokers and telebrokers
The direct channel increased its share of commercial insurance GWP by 1% in 2006
Affinity groups remain a small channel for the distribution of commercial insurance
Banks and building societies continue to play a small role in the distribution of commercial insurance
Organic growth remains a key strategy for brokers, although broker acquisitions remain popular
Brokers are keen to pursue organic growth
More than one fifth of the brokers surveyed have acquired a fellow broker
More than a third of brokers surveyed are considering planning an acquisition in the next 12 to 18 months
Increasing premium turnover and regional growth are the key motivations for planning a broker acquisition
The broker network model remains popular as many brokers wish to gain access to a larger panel of insurers
Over a third of brokers are part of a broker network
Many brokers joined a broker network to gain access to a larger panel of insurers
The proportion of brokers considering joining a broker network has decreased since the H1 2007 survey
Customer Focus
Introduction
Larger companies are more likely to have switched brokers between 2006 and 2007 while Jardine Lloyd Thompson performed well in terms of acquisition and retention
Companies with a large turnover are more likely to switch broker
Commercial clients are more likely to switch from a multinational than any other intermediary but overall those who switch are more likely to move to a smaller broker
Jardine Lloyd Thompson leads the pack in successfully acquiring and retaining customers, with Willis a close second, whilst Marsh and Aon in particular suffered negative net retention
Aon was the largest net loser of clients between 2006-7, shedding clients to brokers from both within and outside the top four
SMEs buy mainly through brokers and long-term relationships are the norm
In general SMEs are content with their insurance providers and satisfaction levels remain high
Retention levels among SMEs remain high with most staying with their provider for longer than two years
Almost 90% of SMEs are not considering a change of provider in the next year
A small group of SMEs are willing to switch provider in search of lower prices
Only 16 per cent of SMEs have changed insurance provider in the last two years
Premium costs are particularly a concern for those that have switched recently
One in 10 SMEs are considering switching their insurance provider in the next 12 months
Recent switchers show lower loyalty levels than other SMEs
Price is the dominant concern for potential switchers
Most SMEs would approach a broker if switching but some are open to alternatives
Brokers remain the top choice for SMEs to approach if they had to switch provider
Many SMEs are willing to consider alternative channels when prompted
Up to 44% of SMEs would consider using a bank as an insurance provider
Almost three quarters of SMEs would be willing to consider direct insurers, in the hope of cost savings
Many SMEs are open to purchasing insurance by telephone
Even more SMEs are willing to buy their insurance via the Internet, showing the potential of this platform
Commercial motor and property insurance are most likely to be purchased through alternative platforms
Alternative distribution channels face a number of challenges in attracting switchers
A core group of SMEs will not buy direct, as they believe that direct insurers are more expensive
Brand awareness in the commercial sector remains low, hampering progress for direct insurers
Over 50% of SME will not consider buying from bancassurers
Direct insurers and bancassurers also have to overcome the unwillingness of some SMEs to buy by telephone or Internet
Two thirds of SMEs consider purchasing commercial general insurance too complex for the telephone
A majority of SMEs view commercial general insurance as too complex for the Internet
Competitive Dynamics
Introduction
The market saw a number of mergers and acquisitions, many involving brokers
AXA acquired numerous commercial brokers in 2007, reinforcing its position in the SME sector
Groupama acquired a majority stake in Lark Group in August 2007
Direct Line began to offer business insurance in 2007
Equity Insurance Group recorded a large number of small-scale acquisitions
Towergate continued to acquire numerous brokers in 2007
Other brokers acquiring included Jelf, Giles, Broker Network and Oval
The top ten brokers have a market share of 96% of client turnover
The greater the turnover, the greater the market share of the multinational brokers
Of the companies in Datamonitor’s Insurance Broker Database, 22 arranged their insurance in-house
Aon acquired Footman James in 2007 and is looking to improve its claims process
Aon to use InterResolve to revolutionize claims process
Aon acquired specialist motor insurance broker Footman James in 2007
Willis is planning to grow its SME business and introduced a new commission structure in 2007
Willis aims to grow its UK SME business
Willis alters remuneration package by introducing 2.5% commission on top of all fees
Jardine Lloyd Thompson is to establish a new underwriting division and has said that a transformational deal may happen in future
Jardine Lloyd Thompson asserts independence from big 3
JLT bought niche personal lines broker Pavilion in 2007
JLT to establish an underwriting division
The Future Decoded
Introduction
The broker channel is dominant in UK commercial insurance distribution, however its share of the market is declining
Brokers are forecast to see a 1% decline in market share between 2007 and 2011
The direct channel will see its commercial insurance distribution share rise to 11% by 2011
It is anticipated that insurers will make more affinity deals with retailers and associations to sell commercial insurance
Banks are expected to retain a distribution share of around 1% between 2007 and 2011
Company staff and agents will see slight reductions in market share
APPENDIX
Definitions
SME
Definitions of ABI terms
Brokers
National brokers
Other intermediaries & brokers
Chain brokers & telebrokers
Direct
Other company agents
Utilities/retailers/affinity groups
Company staff
Banks/building societies
Written premiums
Methodology
Datamonitor’s UK Commercial Insurance Broker Competitor Database
Source of data
Industry sectors
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
Browse complete UK Commercial Insurance Distribution 2010 Report
Browse all Banking and Financial Services Market Research Reports
Browse all Datamonitor Market Research Reports RSS
Browse all Latest Report
Related Reports:
UK Commercial Insurance Distribution 2009
Distribution in UK Commercial General Insurance 2008
UK Personal Insurance Distribution 2010
About Us:
Reports and Reports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
Website: http://www.reportsandreports.com/
Blog: http://reportsnreports.wordpress.com/
Blog: http://reportsandreports.blogspot.com/
