Consolidation and concentration also faces sector
The UK professional indemnity (PI) and directors and officers’ (D&O) insurance markets are set for more growth, according to insurance software and benchmarking firm Timetric.
Timetric said that the UK PI and D&O markets had shown constant growth since 2012. According to a new Timetric report, the top five professional indemnity insurers increased their combined market share from 44.5% in 2012 to 52.8% in 2014.
According to the report, the PI insurance category grew at a compound annual growth rate of 7.15% during 2010–2014 and was worth £1.17bn in gross written premium at the end of 2014.
Timetric expects this class to reach more than £1.5bn by 2019 due to trends in business population and confidence, directors’ rising public exposure through social media, and increasing regulatory activity.
Timetric financial services analyst Steffen Mueller said: ”With Direct Line’s market entry this year, a new competitor is ready to increase capacity in the SME market and take some market share in the category.
“However, while the professional indemnity market is still one of the UK’s least concentrated insurance markets, market power is now gradually shifting to the larger professional indemnity insurers like AIG and Hiscox.
“A merger between Zurich and Royal & Sun Alliance is currently under consideration, which would create a new big player in the sector. Regardless of this merger becoming reality, however, the next years will be marked by a trend towards concentration and consolidation.”