UK Commercial Insurance Distribution 2018

UK Commercial Insurance Distribution 2018


"UK Commercial Insurance Distribution 2018", report provides an in-depth study into commercial insurance distribution trends. It discusses the influence of the different purchasing behaviors of SMEs compared to larger corporate businesses, and pays particular attention to the role and strategy of brokers within product distribution. It also addresses challenges in the market and the impact of technology on consumer channel preferences, before concluding with a distribution forecast for the coming years.

Commercial insurance remains a highly competitive space, and the distribution of the markets products continues to evolve. Brokers maintain a grip on the greatest share of the market, and the channels footprint saw a rise in premium share in 2016 according to Association for British Insurers (ABI) statistics. With enduring dominance in non-SME markets and fast-flow business, digital brokers are finding success even against the threat of the direct channel in the SME space.


- Brokers dominate the distribution of commercial insurance with a 79.0% share of the market.
- The broker landscape has been transformed by digital offerings via price comparison sites and innovative players.
- Acquisitions were a key trend in 2017, with consolidation a priority for brokers and insurers amid tough conditions.

Reasons to buy

- Adapt your distribution strategy to ensure it still meets the needs of clients and intermediaries.
- Ensure you remain competitive as new innovations revolutionize the purchasing journey for clients and brokers.
- Benchmark yourself against other players in the market.
- Be prepared for how technology is set to impact the commercial insurance market.

1.1. Brokers dominate as the direct channels share falls 2
1.2. Key findings 2
1.3. Critical success factors 2
2.1. Introduction 8
2.2. Key regulatory updates 8
2.3. Brokers continue to dominate, and are fighting back in the SME space 9
2.3.1. Price comparison sites expand SME insurance at the expense of traditional brokers 11
2.3.2. Banks and building societies saw a steady decline in market share 13
2.4. Commercial insurance distribution within the direct channel 14
2.4.1. Brokers continue to control commercial insurance 14
2.4.2. AXA and Aviva dominate the increasingly digital SME market 17
2.4.3. AXA buys XL to boost its commercial offering 17
2.4.4. Simply Business leads the success of e-brokers in the SME market 18
2.4.5. Zurich and Hiscox find tech partners for innovative SME insurance 19
2.5. Retailers/affinity groups and commercial insurance 20
2.5.1. Affinity providers target SMEs with commercial insurance products 20
2.6. Banking providers and the distribution of commercial insurance 21
2.6.1. Banks and building societies are used the least to purchase commercial policies 21
3.1. The broker landscape is dominated by five global firms 25
3.2. Global brokers retain the largest share of commercial revenues 25
3.2.1. The top five brokers accounted for around 28.7% of the total market in 2017 25
3.2.2. Marsh overtakes JLT 26
3.2.3. JLT falls to second place 27
3.2.4. Arthur J. Gallagher improves to third position 27
3.2.5. Willis moves back into fourth after Towers Watson Merger 28
3.2.6. Aon falls to fifth following strong growth from rivals 28
3.3. Common themes emerge from the growth strategies of brokers 29
3.3.1. Brokers look to facilitate growth through cross-selling and upselling 29
3.3.2. Acquisitions are high on the agenda of national brokers 31
3.3.3. Brokers are warming to the use of social media 33
3.3.4. Provincial brokers keep the focus on traditional methods but seek to develop online channels 35
3.3.5. Super-regionals are prioritizing social media engagement 35
3.3.6. National brokers are looking to enhance their online propositions 36
4.1. Innovation is creeping into the commercial sector 39
4.1.1. Commercial lines carriers are set to benefit from the introduction of blockchain 39
4.1.2. E-trading is becoming the norm in commercial insurance 40
4.1.3. AXA agrees deal with Brolly 41
4.1.4. Gig economy insurance emerges as the sector continues to grow 42
4.1.5. AI-driven commercial insurance tech company raises 4.4m 43
4.2. How will the distribution landscape change in the coming years? 43
4.2.1. Growth in the commercial market stems from SME insurance 43
4.2.2. The continued growth of digital brokers will cut into traditional brokers and direct channels 44
5.1. Abbreviations and acronyms 46
5.2. Definitions 46
5.2.1. Brokers 46
5.2.2. Direct 46
5.2.3. SME 46
5.3. Methodology 47
5.3.1. GlobalDatas 2017 UK SME Insurance Survey 47
5.3.2. GlobalDatas 2018 UK Commercial Broker Survey 47
5.4. Bibliography 48
5.5. Further reading 48

List Of Tables

List of Tables
Table 1: The top five direct insurers (by percentage of SME respondents), 2017 17
Table 2: Leading UK banks and their business insurance providers 24
Table 3: Expansion strategies for brokers 31
Table 4: Broker business growth strategies, percentage point movement, 2016-17 33
Table 5: SME and non-SME GWP splits, 2016-21f 43
Table 6: Share of commercial insurance distribution by channel (%), 2016-22f 45

List Of Figures

List of Figures
Figure 1: The broker channel increased its share after years of decline 10
Figure 2: Online channels continued to grow in 2017 11
Figure 3: The majority of medium enterprises still use the broker channel 13
Figure 4: The direct channels share of commercial insurance is on the decline 15
Figure 5: Direct channel GWP rose in 2017, despite a decline in market share 16
Figure 6: AXAs acquisition of XL is not expected to hugely impact its presence in the UK market 18
Figure 7: The affinity channels share of commercial insurance has been on the rise 20
Figure 8: GWP within the affinity channel exceeded 500m in 2015 21
Figure 9: The bank channel accounts for a tiny proportion of the overall market 22
Figure 10: The bank channel saw slight GWP growth in 2017 after consecutive declines 23
Figure 11: Marsh overtook JLT as the leading broker 26
Figure 12: Cross-selling/upselling and increased marketing remain the most popular expansion strategies 30
Figure 13: National brokers look to acquisition and geographic expansion 32
Figure 14: Social media adoption has seen substantial growth 34
Figure 15: Provincial brokers mostly embrace features associated with traditional insurance broking 35
Figure 16: Super-regional brokers have the highest adoption of social media to engage clients 36
Figure 17: National brokers are looking to improve their use of social media as an engagement tool 37
Figure 18: The commercial sector is set to see growth up to 2022 44
Figure 19: Brokers share will continue to grow as the direct channel declines 45

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