The gross written premium (GWP) of the commercial motor insurance market in the UK was valued at GBP5.0 billion in 2020. The market is projected to grow at a CAGR of more than 2% during the period 2021-2025. The growth in GWP in the UK commercial motor insurance market was driven by an increase in the number of light goods vehicles (LGVs) on the road – an effect of increasing demand for home deliveries amid the COVID-19 pandemic. Technology is set to change the face of the commercial motor, with electric vehicles (EVs), connected vehicles, and delivery drones set to become more popular within the decade. These present both challenges and opportunities for insurers as new markets emerge and vast swathes of data become readily available.
LGVs was the largest type segment in terms of the number of vehicles in 2020 followed by company cars, HGVs, and buses and coaches. The number of LGVs on the roads has been rising steadily over the past five years despite the shortage of drivers. Given the shift in consumer behavior towards online shopping and deliveries one can reasonably expect this trend to continue over the coming years, assuming the driver shortage does not worsen.
Overview of the commercial motor insurance market in the UK
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What are the market dynamics in the commercial motor insurance market in the UK?
The commercial motor insurance premiums increased over the course of 2020. The increase in the price of premiums has been driven by increasing average claim costs, which will be an increasingly important factor as in-vehicle technology develops. Meanwhile, the greater need for commercial van policies amid surging demand for home deliveries during the pandemic also helped boost GWP.
The implementation of the Civil Liability Act will increase the small claims limit for road traffic accident (RTA)-related personal injury claims from GBP1,000 to GBP5,000. It will also introduce a fixed tariff of damages for pain, suffering, and loss of amenity for whiplash injuries. The act has been welcomed by insurers as it is expected to help reduce the cost of claims payouts. Having only been implemented in May 2021, the full effects of this new act are yet to be realized.
The progression of autonomous vehicles should reduce the number of accidents on the UK road network, as once fully automated the risk of human error will be removed. While autonomous technology is unlikely to be widely available for a number of years, once more popular and widespread the potential impact on the motor claims market could far exceed that of any regulation currently implemented or proposed.
What are the different vehicle types in UK’s commercial motor insurance market?
The type segment in the commercial motor insurance market constitutes cars, LGVs, HGVs, buses and coaches, and other vehicles. LGVs were the largest number of licensed commercial vehicles in the UK in 2020, followed by company cars, HGVs, and buses and coaches.
LGV insurance market in the UK
As non-essential retail stores closed during the various lockdowns, shoppers turned to online sales. Although growth in online services has been exacerbated by the pandemic, e-commerce will remain significantly higher than it was before the pandemic as consumers increasingly embrace online purchasing due to its convenience (especially as working from home becomes more commonplace post-COVID-19). As a result, LGVs will continue to make up a significant share of the UK commercial motor landscape.
Company car insurance market in the UK
The total number of commercial vehicles licensed in the UK declined in 2020. This was primarily driven by a reduction in company cars, as working from home measures led to a fall in demand for vehicles such as taxis.
HGV insurance market in the UK
The number of HGVs on the road declined in 2020 owing to a lack of qualified drivers, worsened by Brexit and the pandemic. Meanwhile, HGV driver tests have been relaxed in order to help increase the number of drivers in the short term. This brings about its own problems for insurers. Newly qualified drivers who are not able to park their vehicles are more likely to be involved in collisions. These will typically be low-speed collisions, but around sorting depots or people’s property, the value of these claims could be significant to insurers. This will lead to a rise in premium prices for HGVs in the short term.
Buses and coaches insurance market in the UK
Measures to reduce social contact, working from home, and reducing mobility decreased the need for buses and coaches throughout the year. The number of these vehicles declined by over 9% in 2020.
Commercial motor insurance market in the UK, by type
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Who are the major players in UK commercial motor insurance market?
RSA has been the market leader in the UK commercial motor insurance market since 2013. It retained the top spot in 2020 with a market share of more than 13%. Aviva is now the second-largest player in the market, while Allianz holds third place. Admiral and AXA round out the top five. RSA discontinued new sales for individual commercial van and business car products in September 2020, allowing ongoing contracts to continue until expiration. The insurer is now looking to focus on flexible policies for fleets of all sizes. Aviva offers comprehensive as well as third-party, fire, and theft cover across a number of different products. Standard features include GBP500 tool cover, 24-hour pickup, uninsured driver protection, and a lifetime guarantee on repairs.
Commercial motor insurance market in the UK, by key players
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Market report scope
| Market size (Year – 2020) | GBP5.0 billion (Gross Written Premiums) |
| Growth rate | CAGR of >2% from 2021 to 2025 |
| Base year for estimation | 2020 |
| Segmentation by type | Company Cars, LGVs, HGVs, Buses and Coaches, and Other Vehicles |
| Forecast period | 2021-2025 |
| Key players | RSA, Aviva, Allianz, Admiral, AXA, NFU Mutual, Zurich, QBE, Direct Line Group, and Haven Insurance |
This report analyzes UK commercial motor insurance, looking at the market in terms of GWP, claims, road casualties, the motor parc, regulations, and opportunities. It discusses the impact of COVID-19 and further implications related to claims. It also looks at the leading competitors and their product offerings, as well as provides future forecasts of market size up to 2025.
Reasons to Buy
- Identify key factors that are influencing the cost of premiums.
- Learn how current and future regulations will influence the market.
- Ensure you remain competitive as new innovations and insurance models begin to enter the market.
- Benchmark yourself against leading competitors.
- Understand the impact of COVID-19 on the commercial motor insurance market.
Key Players
Table of Contents
List of Tables
List of Figures
Frequently Asked Questions
The gross written premium (GWP) of the commercial motor insurance market in the UK was valued at GBP5.0 billion in 2020.
The commercial motor insurance market in the UK is projected to grow at a CAGR of more than 2% during the period 2020-2025.
Key vehicle types in UK’s commercial motor insurance market include company cars, LGVs, HGVs, buses and coaches, and other vehicles.
RSA is the leading player in the commercial motor insurance market in the UK followed by Aviva, Allianz, Admiral, AXA, NFU Mutual, Zurich, QBE, Direct Line Group, and Haven Insurance.
