ITEM Club: premium growth to slow
With household incomes under pressure, the near-term outlook for UK life insurance premiums is “difficult”, according to a new report from Ernst & Young’s ITEM Club.
The market remained flat during 2010 and the economic forecaster expects life premiums to grow by just 0.5% in 2011 and by 1.7% in 2012, commenting: “High insurance penetration rates in the UK signal that it is a maturing market with limited growth potential in the domestic market”.
The Club also predicts slower growth in non-life premiums this year and next, as economic pressures force firms to compete for reduced business volumes.
According to latest estimates, UK insurers’ non-life premium volumes increased by around 2% in 2010, helped by higher rates, but ITEM Club expects the rebound to be short-lived and it is forecasting growth of 1.5% per annum for 2011 and 2012, followed by growth of around 3.5% per annum from 2013, as economic conditions improve.
On asset management, the analyst is hopeful that recent sharp declines in stock markets will partially reverse by the year-end, although assets under management could be around 9% lower compared to a year earlier.
They also remain under the threat of a “calamitous” event for capital markets, in the form of a sovereign debt default.
More positively, the rise in motor insurance claims which has carried the blame for the sharp increases in premium rates over the past decade, looks set to level off because forthcoming legislation on referral fees will almost certainly reduce injury litigation, and hence reduce fraudulent claims.
According to the Association of British Insurers, three-quarters of personal injury claims in the UK are for whiplash, more than elsewhere in Europe, with insurers paying out nearly £2 billion a year for whiplash injuries, which are notoriously difficult to assess and verify.
Category: Insurance News, Life Insurance News
Visited 1189 times, 3 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.