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UK Commercial Motor Insurance- Market Dynamics & Opportunities 2017

09-19-2017 05:01 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: ReportsWeb

ReportsWeb

ReportsWeb

ReportsWeb.com published “Commercial Motor Insurance Market” from its database. The report covers the market landscape and its growth prospects over the coming years. The report also includes a discussion of the key vendors operating in this market.

"UK Commercial Motor Insurance: Market Dynamics & Opportunities 2017", analyzes the UK commercial motor insurance market, looking at market size as well as changes in premiums, claims, road casualties, the motor parc, regulations, and opportunities. It discusses competitors in the market, how the market is likely to change due to telematics and driverless cars, and provides future forecasts of market size up to 2021.

The commercial motor insurance market grew slightly in 2016. This was a result of economic growth, which in turn increased business prosperity and therefore the investment in commercial vehicles to support business expansion. Despite growth in commercial motor, the market is heading towards unprofitable territory as it is expected that rates will begin to harden over the next few years, until further government reforms are introduced that might lower claims costs. As reported last year, claims costs fell initially when LASPO was implemented back in 2013, but the claims environment has now stabilized. Some insurers continue to report rises as the market has adjusted to the legislation. The commercial motor parc continued to increase in 2016, with light goods vehicles and company cars driving the majority of growth. However, with the UK's vote to leave the EU it is expected that motor parc growth will slow, as businesses will have less confidence and money to invest in new commercial vehicles until the economy begins to recover. While reforms will provide instant benefits upon implementation, telematics and driverless technology will help reduce the frequency of claims in the longer term.

For more information about this report at http://www.reportsweb.com/uk-commercial-motor-insurance-market-dynamics-and-opportunities-2017

Scope

-Gross written premiums for the commercial motor insurance market grew by 4.5% to £4.17bn in 2016.
-The claims environment, alongside personal motor insurance, remains in a state of uncertainty around the impact of the discount rate reduction to-0.75% and whiplash claim reforms.
-There are concerns among industry experts around longer-term market profitability and the availability of reserves to bolster combined operating ratios, particularly if the predicted negative impacts of leaving the EU come to fruition.

Reasons to buy

-Benchmark yourself against the rest of the market.
-Ensure you remain competitive as new innovations and insurance models begin to enter the market.
-Be prepared for how regulation will impact the commercial motor insurance market over the next few years.

Request a sample copy at http://www.reportsweb.com/inquiry&RW00011037913/sample

Table of Contents
1. EXECUTIVE SUMMARY 3
1.1. Future growth continues to be linked to economic prosperity and the ability to respond to market dynamics 3
1.2. Key findings 3
1.3. Critical success factors 3
2. MARKET DYNAMICS 10
2.1. Introduction 10
2.2. Commercial motor GWP grew slightly in 2016 10
2.2.1. The total motor insurance market grew by 10.3% in 2016 10
2.2.2. The commercial motor insurance market grew to £4.17bn in 2016 12
2.2.3. Lloyd's of London accounts for 7.7% of the commercial motor market 12
2.3. Excluding IPT, commercial motor insurance premiums remained flat over 2016 12
2.3.1. IPT has been increased to 12% 12
2.3.2. The IPT increase kept premiums in check in 2016 13
2.3.3. Premium rates will have to rise in addition to IPT if the market is to remain profitable 13
2.4. Claims costs are putting pressure on profitability 14
2.4.1. The discount rate was changed from 2.5% to-0.75% 14
2.4.2. Insurers' profits have been hit by the rate change 14
2.4.3. The Ogden rate change cost has impacted profitability 15
2.4.4. The MoJ is consulting on how the Ogden discount rate should be set going forward 15
2.5. Claims frequency is down but severity is increasing 15
2.5.1. CMCs have consolidated following LASPO 15
2.5.2. The ABI reports that the number of commercial claims notified remained flat in 2016 16
2.5.3. Personal injury motor claims have risen for the past two years 17
2.5.4. Whiplash claims account for up to 80% of motor personal injury claims numbers 18
2.5.5. Fraud remains a significant issue 19
2.5.6. Motor personal injury claims remain high, while RTA claims are in decline 19
2.5.7. Most RTA casualties are car occupants, but these are the least vulnerable road users 20
2.5.8. The number of RTA casualties continues to fall across all road user types 20
2.5.9. The number of pedal cyclist casualties has reached a five-year low 21
2.5.10. Larger commercial vehicles are colliding with pedal cyclists 21
2.6. The UK commercial motor parc continues to grow in a positive economic outlook 22
2.6.1. The commercial motor parc increased by 3.9% against 2015 figures 22
2.6.2. Company cars and LGVs are the most common commercial vehicle types 22
2.6.3. The number of newly licensed commercial vehicles rose slightly in 2016 25
2.6.4. The majority of commercial vehicles continue to be licensed in the South East 26
2.6.5. Road usage continues to rise as a result of a growing motor parc and cheaper fuel 27
3. COMPETITOR DYNAMICS 30
3.1. RSA, Aviva, and Allianz lead the commercial motor market 30
3.1.1. RSA has been the top commercial motor insurer for the past three years 31
3.1.2. Aviva is the second-largest commercial motor insurer 31
3.1.3. Allianz and LV= are combining to form a joint venture 32
3.1.4. NFU Mutual specializes in insuring agricultural and specialist commercial vehicles 32
3.1.5. AXA's commercial business is growing through its mid-market proposition 33
3.1.6. Other developments from commercial motor insurers 33
4. THE MARKET GOING FORWARD 35
4.1. The Civil Liability Bill aims to reform personal injury motor claims 35
4.1.1. The benefits of LASPO did not fully materialize 35
4.1.2. Initial proposals aimed to increase the small claims track limit and remove general damages for minor soft tissue injuries 35
4.1.3. The MoJ has published its first response to the consultation on reforms 35
4.1.4. The Prisons and Courts Bill was scrapped due to the snap general election 36
4.1.5. The Queen's Speech following the election introduced a Civil Liability Bill 36
4.1.6. There has been a split reaction to the Civil Liability Bill 36
4.1.7. Estimates suggest the Civil Liability Bill will save customers £35 on motor insurance premiums 37
4.1.8. The small claims limit will increase to £5,000 for RTA claims 37
4.1.9. A tariff system is being introduced for RTA-related soft tissue injury claims 38
4.1.10. Claims will not be settled without a MedCo medical evidence report 39
4.2. Proposed reforms will impact motor insurance profitability 40
4.2.1. Tariffs and the small claims track limit increase will have a significant impact 40
4.2.2. The increase in the small claims track could affect 70-80% of claims 41
4.2.3. Legal costs could be reduced by up to 50% 42
4.2.4. The introduction of tariffs could reduce whiplash claims costs by £1bn 42
4.2.5. The success of reforms will be dependent on how and when the market responds 42
4.3. The size of the commercial motor market will depend on rates 42
4.3.1. The future of the commercial motor insurance market is reliant upon three main factors 42
4.3.2. The dynamics of growth for the commercial motor insurance market will shift in the next few years 43
4.3.3. The economy will continue to dictate growth of the commercial motor parc 44
4.3.4. Rates may rise in response to claims inflation, but may fall due to new government reforms 45
4.3.5. IPT rises continue to drive costs for insurers and customers alike 46
4.4. Vehicle technology will reduce claims costs in the long term 46
4.4.1. Usage of telematics and safety features are increasing in the commercial motor market 46
4.4.2. 65% of businesses are using telematics in their vehicles 47
4.4.3. Some aspects of vehicle technology usage will have longer-term benefits 47
4.4.4. The government is supporting the development of driverless technology 48
4.4.5. Motorists with driverless cars will be required to have dual insurance policies 48
4.4.6. Autonomous car manufacturers are entering the insurance market for driverless cars 49
4.4.7. Motor insurers are looking to partner with driverless car manufacturers 49
4.4.8. More than half of new UK cars are now sold with autonomous features 50
4.4.9. The need for personal car insurance could diminish, causing the commercial market to grow 51
4.4.10. Driverless technology is being developed to create autonomous delivery services 51
4.4.11. Improved vehicle technologies have business benefits outside of insurance 52
4.5. Implications of other legislation under consideration 52
4.5.1. Implications of the Vnuk ruling 52
4.5.2. Environmental improvements promised through Clean Air Strategy 53
5. APPENDIX 54
5.1. Abbreviations and acronyms 54
5.2. Bibliography 54
5.3. Further reading 59

Companies Mentioned
RSA
Aviva
Allianz
NFU Mutual
AXA
Zurich
QBE
LV=
Direct Line
Ageas

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