Latest Report: Commercial Property Insurance in the Uk to 2017

Commercial Property Insurance in the UK - Key Trends and Opportunities to 2017

Synopsis 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 Summary 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,...