This Key Note Market Report examines the market for insurance in the UK, focusing on both the general insurance and long-term insurance sectors. The market for insurance has experienced prolonged difficulties of late, with some significant declines in value witnessed in recent years. The market contracted year-on-year between 2007 and 2010, and Key Note is predicting that a further decline in value will be seen in 2011, when the market is expected to have fallen by a further 0.7% from £144.6bn in 2010 to an estimated £143.63bn in 2011.
The long-term insurance sector has been hit the hardest, and much of the decline in the industry’s value is down to the value of the long-term insurance sector falling from £185.38bn in 2007 to £108.42bn in 2011, an overall fall of 41.5%. The occupational pensions sector is the largest subsector of long-term insurance and this has been hit particularly hard by the recession, mostly due to the high levels of unemployment, meaning so many fewer workers are part of such schemes. Income protection insurance and annuities have also fallen fairly considerably from their 2009 peak.
Although the general insurance sector declined in value between 2007 and 2009, growth returned in 2010 and Key Note is predicting further growth in 2011, when the sector will grow by 3.2% from £34.12bn to £35.22bn. The rising cost of car insurance, the largest subsector of the general insurance sector, is a major driving factor behind the increase. Growth in motor insurance was strong in 2010 and Key Note is predicting stronger growth for 2011. More modest increases were also seen in the accident and health subsector, and in private medical insurance, which was more than enough to offset declines seen in general liability and property insurance.
This report is available to current London Business School staff, students and faculty from Key Note Online which can be found on the A-Z list of library databases via Portal.