UK insurance market growth figures are forecast

Posted : 19-07-2005

The UK insurance market is forecast to grow over coming years, with sales of general insurance likely to continue to grow faster than sales of long-term insurance.

New figures from the Insurance Industry Market Review 2005 show that, despite the insurance industry experiencing a challenging period, the industry is set to grow between 3.3 and 3.7 per cent each year until 2009.

Growing regulation, weakening premium rates and uncertainty in the financial markets have caused serious challenges to the industry during 2005.

Organisations such as the Financial Services Authority (FSA) and the EU have adding to the industry's cost base, whilst insurers undercutting each other's prices have softened premium rates, causing concern about profitability in the industry.

Uncertainty has been caused as people are not saving enough, in October 2005 the Pensions Commission will deliver its recommendations on how to address the so-called pensions gap.

However, changes in the rules governing the sale of insurance (as laid down by the FSA) have opened up new channels of distribution, with the result that insurance companies have increased their number of outlets.

Long-term insurance accounted for an estimated 73.2 per cent of the market in 2004, although the sector's value has fallen by 1.8 per cent since 2001.

Sales of general insurance have, on the other hand grown by 20.1 per cent.


© Adfero Ltd

The views expressed within the article are entirely those of Adfero Ltd and are not those of BDML Connect Ltd