London Company Market measured at £22bn IUA statistics report paints comprehensive picture of annual premium income

Associations, Insurance and Reinsurance — By on November 14, 2012 at 12:48 AM

Dave Matcham

More than £17bn of premium income was written by the company market in London during 2011, a new statistical analysis by the IUA has revealed. And a further £5bn was written elsewhere, but controlled by London market offices.

The IUA’s London Company Market Statistics Report has, for the first time, highlighted the large amount of wholesale and commercial business written by extensive networks of UK and overseas agents and branches, but governed by London companies. Such ‘controlled’ business accounted for more than one fifth (22.6%) of the overall total of gross written premiums earned.

Dave Matcham, IUA Chief Executive (pictured), said: “London is well known as an international insurance centre. Cover is regularly sought from the city’s concentration of underwriting expertise for unusual and difficult risks originating all over the world.

“But this year’s IUA statistics report shows clearly that the capital’s influence in the global market is not restricted to the business that it draws in from overseas to write at offices dotted around the EC3 postcode.

“With £5.052bn being declared in this category and a further £17.261bn physically written in the London market, the true economic and intellectual premium total for the company market is £22.313bn. This compares similarly to the latest figure declared by Lloyd’s of £23.477bn, giving a combined London Market premium income of £45.790bn for 2011.”

 

The 2012 IUA survey canvassed 57 companies operating in London, but outside of the Lloyd’s market. They were asked to restate their figures for 2010 which gave a revised total of £16.452bn (not including premium controlled by London). When compared with the corresponding figure for 2011 (£17.261bn) this revealed a slight increase of premium income across the company market of 4.9%.

Other enhancements in the latest London Company Market Statistics Report include the segregation of motor business and a more detailed breakdown of geographical territories. The difference between premium totals net and gross of commission is also stated with much greater accuracy.

Analysing the results of business written in London by method of placement shows that the company market is dominated by direct and facultative placements, which accounted for 80% of business in 2011 while treaty contracts made up only 20%.

When considering the territory from which business originates there is also a clear dominating feature with the UK and Ireland being the major source of income. In 2011 the US and Canada generated the next largest total followed closely by the rest of Europe. The IUA’s survey also divides premiums into six main classes of business with a seventh category labelled ‘other’ added to capture any member returns which did not fit into any of the headline classifications. Results here demonstrated a relatively even spread of business with the top four classes all recording sizeable chunks of premium income. Property/casualty business is most dominant with property accounting for the largest share of premium and liability and professional lines both also making significant contributions. On the marine and aviation side of the market, it can be seen that London is still a major leader in both these classes.

Dave Matcham added: “Last year’s inaugural London Company Market Statistics Report gave a long overdue, accurate analysis of our sector. We received much positive feedback following its publication and are pleased to have produced an even bigger and better report for 2012.

“This year’s survey represents an extremely reliable and stable analysis which will prove invaluable for comparison purposes. It gives companies the opportunity to benchmark their own performances against the market as a whole and will provide an optimal base line from which future trends may be tracked in the years to come.”

Full copies of the London Company Market Statistics Report 2012 can be downloaded from the statistics page of the IUA website.

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