UK Commercial Motor Insurance: Market Dynamics & Opportunities 2019

This report explores the current size of the commercial motor insurance market in GWP terms, as well as factors such as the cost of premiums, the number of commercial vehicles, and the number of total claims in order to determine the drivers of the current and future market. The report also looks at technological advancements in commercial vehicles and the different policy adaptations key providers are implementing to keep up with the rapidly changing market.

Despite the decrease in the total number of commercial vehicles in the UK, the commercial motor insurance market grew by a significant 11.8% in 2018. This was driven by higher premiums, as insurers passed the growing cost of claims on to customers. As the use of sophisticated technologies in vehicles increases – pushing up the cost of repairs in the process – insurers should expect pressure on claims to remain high. On the other hand, telematics and dash cams are becoming increasingly beneficial for accident prevention. And the introduction of the Civil Liability Act in 2020 has the potential to reduce the cost of claims, albeit not in the short term. Nine out of the top 10 insurers in the market remained unchanged in 2018, and with no new entrants on the horizon competition is likely to remain focused on price.

Scope

– Gross written premiums (GWP) in the UK commercial motor insurance space reached £4,788m in 2018.

– In 2018 the number of commercial vehicles on the road in the UK decreased by 1.3%, while new commercial vehicle registrations decreased by 5.4%.

– The total number of claims settled in 2018 reached its lowest recorded level of 654,810. However, the total cost of claims is increasing.

– RSA remains the market leader, with its market share standing at 12.8% in 2018.

Reasons to buy

– Identify key factors that are influencing the cost of premiums.

– Learn how current and future policy regulation will influence the market.

– Looks at all the current and possible technologies that will change the way commercial vehicles are insured.

– Looks at competitors’ current share of the market and their product offerings.

Companies mentioned

RSA

Allianz

Aviva

AXA

NFU Mutual

Admiral

Zurich

QBE

AIG

Direct Line Group

Volkswagen

Table of Contents

Table of Contents

1. EXECUTIVE SUMMARY

1.1. Technology is a double-edged sword for motor insurers

1.2. Key findings

1.3. Critical success factors

2. MARKET DYNAMICS

2.1. Commercial motor market GWP continues to grow

2.1.1. The commercial motor insurance market grew by

11.8% in 2018

2.1.2. Commercial vehicle registrations decreased by

5.4% in 2018

2.1.3. LGVs will continue to dominate the commercial vehicles landscape

2.1.4. The number of miles driven on UK roads continues to rise

2.1.5. Increasing fuel prices will influence the market

2.1.6. The Ogden rate continues to influence the motor insurance market

2.1.7. Any IPT increase could influence the future market

2.2. The number of claims in the commercial motor market decreased

2.2.1. In-vehicle technology is pushing up the cost of claims

2.2.2. Claims settled decreased for the first time since the implementation of LASPO

2.2.3. The number of RTAs continues to fall as UK roads get safer

3. COMPETITOR DYNAMICS

3.1. The UK commercial motor market remains competitive

3.1.1. Competition in the UK commercial motor market remains strong

3.1.2. RSA remained the largest commercial motor insurer in 2018

3.1.3. Allianz remains the second-largest insurer despite a decrease in its market share

3.1.4. Aviva has a diverse product offering

3.1.5. A tenth of AXA’s 2018 growth is attributed to its acquisition of XL Group

4. THE MARKET GOING FORWARD

4.1. The Civil Liability Act will reform the motor claims market

4.1.1. The act will come into force in April 2020

4.1.2. The incoming tariff system is aimed at limiting the cost of claims

4.1.3. Pre-medical offers will no longer be available on RTA whiplash claims

4.1.4. Reaction to the act has been positive

4.2. The commercial motor market is forecast to continue growing

4.2.1. The market is expected to reach £5,488m in GWP in 2023

4.3. Technological innovation continues to shape the commercial motor market

4.3.1. Telematics-based policies continue to provide numerous benefits for businesses

4.3.2. Dash cams are beneficial for the commercial motor market

4.3.3. Sophisticated technologies in vehicles will impact the claims landscape in the future

4.3.4. All new cars must have a speed limiter by 2022

4.3.5. Smart roads will make driving safer

4.4. The potential of autonomous vehicles in commercial lines

4.4.1. Self-driving lorries will be tested in the UK

4.4.2. Safety and testing of autonomous vehicles remains hazy

4.4.3. Insurers will play a crucial role in the development of autonomous vehicles

4.5. The growth of the gig economy could help boost the commercial motor market

5. APPENDIX

5.1. Abbreviations and acronyms

5.2. Methodology

5.2.1. UK Top 20 General Insurance Competitor Analytics methodology

5.2.2. GlobalData’s 2017 and 2019 UK Insurance Consumer Surveys

5.2.3. Forecasting methodology

5.3. Secondary sources

5.4. Further reading

List of Figures

List of Figures

Figure 1: The commercial motor market continued to grow in 2018

Figure 2: The number of commercial vehicles in the UK decreased in 2018

Figure 3: The number of miles driven within the UK continues to increase

Figure 4: Fuel prices increased notably in 2018

Figure 5: The number of commercial motor claims fell in 2018

Figure 6: Total motor claims settled fell considerably in 2018–19

Figure 7: The number of RTAs continues to fall

Figure 8: RSA was the biggest provider in UK commercial motor insurance in 2018

Figure 9: The commercial motor insurance market is forecast to experience year-on-year growth over the forecast period

Figure 10: Forecasting methodology

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