BMI View: On the whole, we anticipate that life insurance premium growth will be both more stable and profitable than in the non-life sector in the coming years. This is due primarily to the stability and strength of the underlying demographic life insurance drivers, which serve to insulate the sector from other macroeconomic or political influences. In the short t erm, the strength of the USD will reduce the trajectory of premiums when expressed in that currency. But the market ' s strengths will ultimately prevail and we expect life premiums to rise by nearly 7.5 annually through 2019. Non-life premiums are forecast to hover just below 1.5% annually. Continued consolidation is also expected , as market conditions foster greater competition, lower prices and product innovation, favouring the major insurers over smaller ones.
|Gross life premiums written, GBPbn||113.56||108.18||123.35||130.55||139.93||151.35||162.30||176.46|
|Gross life premiums written, GBP, % y-o-y||7.1||-4.7||14.0||5.8||7.2||8.2||7.2||8.7|
|Gross life premiums written, USDbn||181.05||167.68||202.30||198.43||229.49||249.73||271.03||308.80|
|Gross life premiums written, USD, % y-o-y||6.0||-7.4||20.6||-1.9||15.7||8.8||8.5||13.9|
|Gross non-life premiums written, GBPbn||42.73||43.85||44.55||45.10||45.62||46.19||46.84||47.59|
|Gross non-life premiums written, GBP, % y-o-y||5.9||2.6||1.6||1.3||1.1||1.3||1.4||1.6|
|Gross non-life premiums written, USDbn||68.13||67.97||73.06||68.56||74.82||76.22||78.22||83.29|
|Gross non-life premiums written, USD, % y-o-y||4.9||-0.2||7.5||-6.2||9.1||1.9||2.6||6.5|
Key Updates & Forecasts
Regulatory changes continue to alter the insurance landscape in the UK. On November 1 2015, the new Insurance Premium Tax (IPT) came into force, raising the tax rate on motor and home policies from 6% to 9.5%. This is likely to push customers to seek additional cost savings, putting downward pressure on premium pricing and further stressing smaller insurers that are already struggling to compete with industry leaders. This supports our view that we will see more mergers and acquisitions in this market in light of a continued positive earnings environment and competition across the industry. The overhaul of the UK's pension system has, in general, brought a steep sales decline for annuities, as retirees are no longer required to purchase them. However, annuity sales did see their first quarterly rise in three years in the third quarter of 2015, rising to GBP1.17GBP from GBP990mn, according to the Association of British Insurers (ABI). Nevertheless, insurers are seizing this trend away from annuities as an opportunity to offset losses by developing new retirement offerings such as income drawdown products and making "bulk" deals with corporate pension schemes.
Elsewhere, RSA Group continues to dispose of its operations in Latin America, recently selling off an additional GBP403mn in assets, bringing the total of agreed disposal in the region to GBP1.2bn. This is part of a strategic decision by RSA to focus on its competitive advantages in other markets, including the UK. On October 5 2015, Ageas bolstered the integrity of its application process by joining the UK Insurance Fraud Register. The firm also officially launched its new home and motor insurance joint venture with Virgin Money on October 14 2015. Ageas will underwrite all home insurance products while a panel of insurers, managed by Ageas Retail, will underwrite motor products. The move is designed to bring pricing consistency and remove minor administrative fees for customers.
The United Kingdom Insurance Report has been researched at source and features BMI Research's independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.
BMI's United Kingdom Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the British insurance industry.
- Benchmark BMI's independent insurance industry forecasts for United Kingdom to test other views - a key input for successful budgeting and strategic business planning in United Kingdom's insurance market.
- Target business opportunities and risks in United Kingdom through our reviews of latest industry trends, regulatory changes and major deals, investments and macroeconomic developments.
- Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts and views, covering the Life and Non-Life segments, the evolving competitive landscape and business operational risks.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the insurance sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2005-2014) and forecasts to end-2019 for key industry indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Life/non-life Premiums: Total premium growth (USDmn), premium growth (% y-o-y), penetration (% of GDP), density (USD per capita) for Life and Non-Life sectors, claims reinsurance, and assets and liabilities.
- Non-life subsectors: Data on gross written premiums for all major Non-Life segments (motor, transport, property, personal accident, health, general liability and credit financial).
BMI’s Insurance Risk Reward Index
BMI’s Risk Reward Indices provide investors (Life and Non-Life) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Growth Drivers & Risk Management Projections
Key data and forecasts to end-2019 focusing on the growth drivers and downside risks to specific insurance lines including:
- Population: Male/female, by age group, active/pensionable/youth population % of total, urban/rural population % of total.
- Freight: Tonnage – air freight, rail freight, road freight, inland waterway.
- Motor: Fleet size by type of vehicle % change y-o-y.
- Epidemiology: Disease Adjusted Life Years and private health expenditure.
Market Overview & Rankings
Illustration of the insurance industry via rankings tables comparing gross written premiums by company (USDmn) and market share (%) for the top 20 players in both Life and Non-Life. This chapter also includes in-depth regional analysis of the market position, business strategies and investment potential of the leading insurance companies.
The insurance Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.