Review
The business – Amlin UK
Market overview
The UK insurance market is a well developed and highly competitive market. The majority of Amlin UK business is sourced through Lloyd’s brokers and regional brokers. Our focus is on commercial business, covering risks with a degree of complexity or scale. Personal lines income written is specialist as the wider UK personal lines market is dominated by large insurers and barriers to entry are low.
Total gross premium for UK commercial insurance in 2007 was £22 billion.The market includes companies such as RSA, Aviva and Axa. In the Lloyd’s market, our key competitors are QBE, Brit, Catlin and Novae.
The UK insurance market is changing fast. In particular, the recent pace of broker consolidation has been remarkable. Greater control over distribution has given larger broker networks greater power over traditional insurance carriers, pressurising margins. While much of this activity has been in mainstream insurance, rather than specialist markets, it has inevitably put greater pressure on wholesale brokers introducing business. This, together with a number of years of aggressive growth by UK general and specialist insurers, has brought consequent rating pressures.
In response to changes in the UK market and with the prospect of an upturn in UK commercial markets, we have increased our investment in our marketing capability and have selectively increased our alignment with UK brokers. For example, in July and August 2008 we made strategic investments in two independent UK brokers, MS plc and TL Dallas Ltd, which we expect will further strengthen our existing long-standing business relationships, expanding and enhancing the product range available to their clients.
In August 2008, we acquired the renewal rights to approximately £20 million of general commercial motor fleet insurance from HCC Underwriting Ltd (HCC). The acquisition will facilitate additional development of our fleet motor book and further demonstrates our commitment to supporting our London Market brokers. We will continue to look for opportunities that increase our product offering.
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