Insurance Times research reveals the performance of the top 10 commercial insurers
The UK commercial market has been a tough place for insurers in which to operate in recent years.
The Insurance Times inaugural Insurance Monitor research report analysed the FSA returns of 20 of the top UK commercial lines insurers. The research revealed that, as a whole, the market has failed to achieve underwriting profit in each of the past three years.
The industry average combined operating ratio (COR) has however seen signs of improvement in the past 12 months. The 2012 COR was 105.3% - 6.8 percentage points better than 2011’s 112.1% - although this is still worse than the 104% achieved in 2010 (see below).
The picture would have been even worse if it had not been for a total reserve release of £242.6m which helped shave 6.8 points off the ratio for 2012. On average, insurers released £12.1m of reserves in 2012. This is down from £14.2m in 2011, but better than the £11.3m released in 2010.
This means that insurers have also managed to improve the underlying COR, a sign that new business is being written more profitably than in previous years. The current-year COR for 2012 was 112.1% - a 22.2 percentage point improvement on the 134.3% achieved in 2011. This is still well above the 100% break-even point, but is at least a step in the right direction.
But not all insurers have been able to improve on their 2011 showing.
Among the top 10 commercial insurers studied in the first Insurance Monitor, Allianz, AIG and ACE all bucked the trend of improving CORs (see below). ACE’s commercial ratio deteriorated by 11 percentage points taking it in to loss-making territory while AIG saw a 3.8 point worsening to its COR. Allianz was the only profitable insurer in the top 10 from an underwriting perspective despite a 4.2 percentage point increase to its COR.
| Ranking | Insurer | 2012 | 2011 |
| 1 | Aviva | 107.9% | 112.7% |
| 2 | RSA | 111.4% | 112.5% |
| 3 | Allianz UK | 98.3% | 94.1% |
| 4 | AXA | 115.1% | 116.7% |
| 5 | NFU Mutual | 109.4% | 114.2% |
| 6 | AIG | 114.6% | 110.8% |
| 7 | ACE | 104.7% | 93.7% |
| 8 | Direct Line | 114.0% | 116.3% |
| 9 | XL | 110.5% | 243.3% |
| 10 | LV= | 105.2% | 114.1% |
Insurance Monitor No.1: Commercial lines performance
Insurance Times subscribers can benefit from the full analysis of UK commercial insurers in Insurance Monitor – UK Insurer Financial Performance: Who is delivering in commercial lines? This brand-new, 60-page report includes an in-depth breakdown of the top 10 UK commercial insurers’ underwriting performance, as well as valuable insight into wider industry trends and figures. To secure your copy, call 020 7618 3089 or click here for more information.
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