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UK SME Insurance: Competitor Dynamics 2018

Published By :

GlobalData

Published Date : Jan 2019

Category :

Banking

No. of Pages : 45 Pages

Competitor Dynamics on UK SME Insurance Market: Snapshot

Several strategies adopted by top players which pertain to innovative product positioning is poised to transform the growth trajectories of the U.K. SME insurance market. The key players such as AXA and Aviva are increasingly focusing on meeting the needs of commercial insurance among SMEs, especially those relating to non-vehicle-based commercial products. A fast growing services sectors in the U.K. mirrors a lucrative trend. Liability specialists over the last couple of years have lost their foothold. Of note, they showed a declining share in 2017. On the other hand, the competitive dynamics in the motor lines segment is different. The segment witnesses a perceptible trend of the increasing popularity of personal lines insurance in the U.K. Thus, this reflects a notable market shift from personal to commercial lines.

Emerging business models will pave way for constant innovations in the U.K. SME insurance market. Microenterprises have also been rising and hence occupies a significant role in the competitive dynamics of the market. Brokers are also changing their business targeting strategies where the top player AXA has a small say in the prevailing competitor dynamics. In the coming years, AXA and Aviva will be competitor fiercely against each other for such unexplored business segments. The dynamics in the market is also influenced by the strides being made by the wholesale and retail sectors. The imminent Brexit might also be a game-changing event and is likely to bring some disruptive to the potential of the U.K. SME insurance market. This is increasingly due to the adverse impact of the exit on the free movement of goods and services. 

Summary
This report looks at which insurers lead the way in the SME segment and how they are developing their propositions. It also highlights how competitor positions vary between micro, small, and medium enterprises. It examines which insurers are winning over brokers and which companies SMEs are placing their business with.

AXA and Aviva dominate the UK SME insurance space across all of the 10 non-vehicle-based commercial products listed in our 2018 UK SME Insurance Survey. However, the pair have slipped within the six motor lines, with Admiral and AA in particular establishing a strong presence at the top of these markets. Meanwhile Allianz recorded a strong performance in the liabilities lines but little impact in the vehicle-based lines. Hiscox and Zurich are liability specialists, although they have both seen their shares decline since 2017. Within the motor lines there is a clear trend of popular personal lines insurers also enjoying success in the SME market. This shows that established relationships are essential and easily transferred from personal to commercial lines.

Scope
- AXAs domination has declined slightly in terms of individual lines, but it still heads seven products.
- Third-placed Allianz remains over 5 percentage points behind Aviva, which highlights that the top two are still way ahead of other brands despite their declines. But this is offset by Allianz underwriting the products of Barclays, which is the fourth-largest player.
- AXAs position in the overall market is not replicated in brokers preference for business placement, where Allianz and Aviva continue to top packaged and non-packaged respectively.

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.
- Adapt your distribution strategy to ensure it is efficient and still meets customer purchasing behavior.

Table of Contents

1. EXECUTIVE SUMMARY 2
1.1. AXA and Aviva continue to lead the market 2
1.2. Key findings 2
1.3. Critical success factors 2
2. THE SHAPE OF THE SME MARKET 8
2.1. Introduction 8
2.2. The big three continue to lead the way for packaged broker insurance 8
2.3. Aviva leads non-packaged as the top two pull away 10
3. PRODUCT POSITIONING 12
3.1. AXA remains the leading insurer, but competitors have closed the gap 12
3.2. AXAs decline saw Aviva challenge for top spot despite its static share 13
3.3. Barclays leads the bancassurance re-emergence 14
3.4. AXA and Aviva are consistent throughout all 16 lines 15
3.5. Hiscox remains a specialist liabilities insurer 16
3.6. Admiral and Direct Line are strong in motor 16
4. TOP FIVE INSURERS BY PRODUCT LINES 18
4.1. Top five players for business interruption insurance 18
4.2. Top five players in directors and officers insurance 19
4.3. Top five players in employers liability insurance 20
4.4. Top five players for key man insurance 21
4.5. Top five players for personal accident and business travel insurance 22
4.6. Top five players for property insurance 23
4.7. Top five players for professional indemnity insurance 24
4.8. Top five players for public liability insurance 25
4.9. Top five players for private medical insurance 26
4.10. Top five players for cyber insurance 27
4.11. Top five players for company cars (single) insurance 28
4.12. Top five players for company cars (fleet) insurance 29
4.13. Top five players for company vans (single) insurance 30
4.14. Top five players for company vans (fleet) insurance 31
4.15. Top five players for vehicle: other (single) insurance 32
4.16. Top five players for vehicle: other (fleet) insurance 33
5. KEY PLAYERS 34
5.1. AXA formed partnerships to boost broker offerings 34
5.2. AXA is focusing on Brexit and modern cyber cover 34
5.3. Aviva is targeting independent brokers with new community launch 34
5.4. Zurich is aiming to boost its SME business with new appointment 35
5.5. Hiscox launched a cyber campaign to raise customer awareness 35
5.6. Cyber specialists could threaten mainstream insurers 36
5.7. Digital Risks shows innovation can thrive in the SME sector 37
6. TOP INSURERS BY NET PROMOTOR SCORE 38
6.1. Avivas impressive NPS could help it challenge AXA at the top of the market 38
6.2. The leading insurers saw strong improvements in NPS in 2018 41
7. APPENDIX 42
7.1. Abbreviations and acronyms 42
7.2. SME 42
7.3. Methodology 43
7.3.1. GlobalDatas 2018 UK SME Insurance Survey 43
7.3.2. GlobalDatas 2018 UK Commercial Broker Survey 43
7.4. Bibliography 43
7.5. Further reading 44

List of Tables
Table 1: Market share of packaged SME insurance, 2014-18 9
Table 2: Market share of non-packaged SME insurance, 2014-18 11
Table 3: Top three players shares across each product line, 2018 17
Table 4: Breakdown of business interruption insurance market shares by size category, 2018 18
Table 5: Breakdown of directors and officers insurance market shares by size category, 2018 19
Table 6: Breakdown of employers liability insurance market shares by size category, 2018 20
Table 7: Breakdown of key man insurance market shares by size category, 2018 21
Table 8: Breakdown of personal accident and business travel insurance market shares by size category, 2018 22
Table 9: Breakdown of property insurance market shares by size category, 2018 23
Table 10: Breakdown of professional indemnity insurance market shares by size category, 2018 24
Table 11: Breakdown of public liability insurance market shares by size category, 2018 25
Table 12: Breakdown of private medical insurance market shares by size category, 2018 26
Table 13: Breakdown of cyber insurance market shares by size category, 2018 27
Table 14: Breakdown of commercial motor - company car (single) market shares by size category, 2018 28
Table 15: Breakdown of commercial motor - company car (fleet) market shares by size category, 2018 29
Table 16: Breakdown of commercial motor - van (single) market shares by size category, 2018 30
Table 17: Breakdown of commercial motor - van (fleet) market shares by size category, 2018 31
Table 18: Breakdown of other commercial motor (single) market shares by size category, 2018 32
Table 19: Breakdown of other commercial motor (fleet) market shares by size category, 2018 33
Table 20: Customer satisfaction among leading insurers in selected lines, 2018 41
Table 21: NPS for leading insurers across key product lines, 2017-18 41

List of Figures
Figure 1: The top three for SME business placement pulled away from their competitors in 2018 9
Figure 2: Aviva continues to lead the market for non-packaged insurance 10
Figure 3: AA and Aviva have eaten into AXAs dominance 12
Figure 4: Aviva cut into AXAs lead as Barclays and Direct Line replaced Zurich and Hiscox 14
Figure 5: Barclays strong presence among SMEs gives it a platform to sell insurance 15
Figure 6: AXA leads the way for business interruption as Zurich and Hiscox dropped out of the top five 18
Figure 7: Ageas replaced Zurich in the top five as shares saw little change in 2018 19
Figure 8: Aviva closed the gap on AXA as Barclays replaced Hiscox in the top five 20
Figure 9: Aviva closed the gap on AXA to share market leader position for key man insurance 21
Figure 10: AXA and Aviva remain clear of competitors in personal accident and business travel insurance 22
Figure 11: Aviva recorded strong growth to overtake AXA in property insurance 23
Figure 12: AXA extended its lead in the professional indemnity market as the top five remained the same 24
Figure 13: Aviva closed the gap on AXA in public liability as other competitors fell away 25
Figure 14: Bupas share declined by 8.9pp, with AXA now a close second 26
Figure 15: The top three cyber insurance players account for over a third of the market 27
Figure 16: AA rose from outside the top five in 2017 to lead the market in 2018 28
Figure 17: Admiral and AA showed strong growth to join Aviva at the top of the market 29
Figure 18: AA and Admiral overtook AXA and Aviva to lead the market in 2018 30
Figure 19: Strong growth from AA saw it challenge Aviva in 2018 31
Figure 20: AA overtook Aviva, which fell to fourth place in 2018 32
Figure 21: Strong growth from Admiral saw it overtake NFU Mutual and AXA 33
Figure 22: Hiscox set out to educate customers on the frequency and dangers of cyber attacks 36
Figure 23: Avivas challenge to AXA will be boosted by its excellent customer relationships 39
Figure 24: The three leading insurers all received positive feedback across the four lines 40

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