Premium Finance

  • The premium finance industry is estimated to be worth £6.5 billion.

Why should people use premium finance?

Types of insurance premiums that can be paid via premium financing include car, home, motorcycles, property, travel and fleet insurance. Both commercial and personal customer groups can pay for their insurance using premium finance and experience the advantages of doing so:

  • Improved cashflow – freeing up the lump sum to use elsewhere
  • Ensuring they have the required level of insurance cover without being held back by the upfront cost
  • Eliminates the requirement for a large up-front payment to an insurance company
  • Multiple insurance policies can be attached to a single premium finance agreement, allowing for a single payment plan
  • Avoids the need to liquidate other assets to ensure insurance coverage
  • By using other people’s money (leveraging the premium finance lender’s capital), customers can keep a significant amount of capital – known as ‘retained capital’.

UK Insurance industry facts and figures

  • The UK insurance industry is the largest in Europe, and the fourth largest in the world
  • As of December 2019, average insurance brokerage company’s sales are 5.6%
  • UK insurers contribute £35 billion to the UK economy
  • 305,500 people employed in the UK insurance industry
  • There are nearly 950 general insurers companies in the UK of which 340 are UK authorised and 563 are headquartered in another European country and passport in under Solvency II.
  • In 2017 the UK exported approximately £18.5 billion of insurance and pension services, equivalent to 31% of the UK’s financial services exports.

Average spend on insurance premiums by type in 2019 from a survey of 1,046 people

Type of Insurance Percentage
Car 63 %
Home 55%
Contents 50%
Life 35%
Private health 13%
Accident 11%
Legal expenses 9%
Statuatory health 7%
Personal liability 6%
None of the above 13%

Insurance Times Top 50 of 2019

Top 50 Brokers of 2019

  1. Marsh
  2. Aon
  3. Willis
  4. BGL Group
  5. Ardonagh Group
  6. BGL Group
  7. Hyperion
  8. Hastings
  9. Lockton
  10. Saga
  11. A-Plan Group
  12. Miller
  13. Tysers / Integro
  14. Global Risk Partners
  15. AA Insurance Services
  16. PIB Group
  17. BMS Broking Group
  18. Adrian Flux
  19. THB Group
  20. Aston Lark
  21. Granite/Acorn Insurance
  22. Ed Broking
  23. Markerstudy
  24. Bravo Group
  25. CFC Underwriting
  26. Simply Business
  27. United Insurance Brokers
  28. First Central
  29. Besso Insurance Group
  30. RFIB Group
  31. One Call Insurance Services
  32. Crispin Speers
  33. Brightside
  34. MCE Insurance
  35. Nexus Underwriting
  36. Specialist Risk
  37. Berry Palmer & Lyle
  38. Animal Friends
  39. Eldon Insurance Services
  40. Vantage Insurance
  41. iGO4
  42. Complete Cover
  43. Bollington Wilson
  44. Right Choice
  45. Be Wiser
  46. Seventeen Group
  47. Alan Boswell Group
  48. Clear Insurance
  49. Barbon Insurance
  50. Lycetts

Top 50 Insurers of 2019

  1. Aviva
  2. Bupa
  3. RSA
  4. Axa
  5. Direct Line Group
  6. Direct Line Group
  7. Admiral
  8. Brit Insurance
  9. Beazley
  10. Allianz
  11. QBE
  12. LV=
  13. NFU Mutual
  14. Ageas
  15. Aspen
  16. British Gas Insurance
  17. Canopius
  18. Esure Group
  19. Hiscox
  20. Covea
  21. Lloyds Bank
  22. CNA
  23. Ascot
  24. Munich Re
  25. Markel
  26. HCC International Insurance Company
  27. AmTrust Europe
  28. Co-Op Insurance
  29. VitalityHealth
  30. Transatlantic Holdings
  31. Chubb
  32. Legal & General
  33. Berkshite Hathaway
  34. Ecclesiastical
  35. Starr International (Europe)
  36. SCOR UK
  37. Domestic & General
  38. Tokio Marine Kiln Insurance
  39. Travelers
  40. The North of England P&! Association
  41. Assurant
  42. Aetna
  43. Fidelis Underwriting
  44. Simplyhealth
  45. ERS
  46. Sabre
  47. Lancashire
  48. Fm Global
  49. The Britannia Steam Ship Insurance Association
  50. International General Insurance

Plimsoll Analysis

Based on total sales the top 10 insurance brokers are:

  1. Jardine Llloyd Thompson Group - £1,378.6 million
  2. DI Insurance - £1,145.6 million
  3. Marsh Ltd – £885.7 million
  4. Aon UK - £820.1 million
  5. Willis Ltd - £747.6 million
  6. JLT Specialty Ltd - £356.3 million
  7. Openwork Holdings Ltd - £355 million
  8. Hastings Insurance Services Ltd - £331.6 million
  9. Towergate Underwriting Group - £201.5 million
  10. Lockton Companies Llp - £183.4 million

The top five companies based on gross profit alone

  1. JLT - £1,386 million
  2. Marsh - £885.7 million
  3. Rac Financial Services Ltd - £101.6 million
  4. Openwork - £78.5 million
  5. Jb Drax Honore (UK) Ltd - £53.8 million

Brokers and which PE firms backed by

  • Anacap Financial Partners (PE firm) backs Brightside Group
  • Inflexion Private equity (PE firm) backs Bollington and Wilsons
  • The Carlyle Group (PE firm) backs PIB Group
  • CDPQ (PE firm) backs Hyperion Insurance Group
  • HgCapital (PE firm) backs A-Plan
  • HPS Investment Partners (PE firms) backs Ardonagh
  • Penta Capital (PE firm) backs Swinford Insurance

Consolidated brokerages

  • Jardin Lloyd Thompson (JLT) and Marsh & McLennan
  • Arthur J. Gallagher and Stackhouse Poland Group
  • Qatar Re and Markerstudy Group
  • BGC Partners and Besso Insurance Group
  • Travelers Companies and Simply Business

Commercial

Acturis index Q4 2019

The Acturis index represents premium movements in a typical broker’s book of commercial business. It uses weighted figures from commercial combined (35%), fleet (25%), property owners (18%), packages (12%) and combined liability (10%) indices based on the portion of GWP each class of business represents in a typical commercial book. Movements in premiums can be driven by changes in the size of the risk and the level of the insurance rate. By comparing each quarter with the same period in the year before, it is most likely to set the pricing of similar risks against each other.

  • The annual increase in average premiums of 8.2% in Q4 2019 is the largest quarterly movement in combined liability since Acturis began recording the data. (2)
  • In commercial combined, the last quarter of 2019 brought an increase of 5.9%. The figure marks the first downward movement since two consecutive quarters of upward movement in this class of business, following rates of 1.7% in Q1 2019, 3.8% in Q2 2019 and 5.4% in Q3 2019.

Motor:

Motor insurance premiums

Motor insurance: Gross written premiums UK 2018 20.72bn EUR
Total motor insurance claims 2018 7bn GBN
Total domestic motor insurance claims 2018 5.3bn GBP
Domestic motor insurance claims paid per day 2017 21.7bn GBP
Commercial motor insuarance claims paid per day 2017 7.3m GBP
Average motor insuarnce private car claim 2952 GBP
Average motor insurance bodily injury claim 10.35k GBP

  • Q3 2019 - Average car insurance premiums fell by 1%
  • The Willis tower Watson and confused.com index revealed that the average car insurance premium fell from £788.70 in Q2 2019 to £783.28 in Q3 2019.
  • Prices have risen by 3.1% on an annual basis, or an average of £23.
  • In 2019, a van was broken into every 23 minutes in the UK
  • Fleet experienced a 2.9% year-on-year increase in premiums reported for Q4 2019

Commercial Insurance:

  • A third consecutive quarter of significant premium growth was reported in commercial liability, with 7.7% year-on-year growth posted for Q3 2019

Health:

  • The average premium for UK private health insurance is £1,435 per year 2019

European wide facts and figures

  • European insurers paid out €1.069bn in claims and benefits to insureds in 2018
  • That is equivalent to 2.9bn per day and represents a 3.1% increase on 2017

Global insurance


In 2018, total premiums written in the global primary insurance markets surpassed the USD 5 trillion mark (USD 5193 billion) for the first time ever, equivalent to around 6% of global GDP

Insurance investment portfolio

  • Investments are an integral part of the insurance business model, in which the premiums insurers receive are invested until claims or benefits become due
  • The insurance sector is the largest institutional investor in Europe and a key source of the investment needed to support growth in the economy
  • In 2018, Europe’s insurers held around 26% of their total portfolio in index-linked and unit-linked funds and 4% in loans and mortgages. The remaining 70% was in other investments, of which around 62% was in bonds.