The value of £4.64 billion has been placed on the total non-life insurance broking market in the UK in 2014, up marginally from £4.55 billion in 2010, according to two new research studies issue by Finaccord.
This is equivalent to a nominal compound annual growth rate of 0.5 percent but a compound annual rate of decline of 2.5 percent in real terms, once inflation has been factored in.
The market in 2014 was composed of around £2.54 billion from commercial lines broking and £2.1 billion from personal lines broking. The value of both segments have reduced in real terms since 2010.
Alan Leach, director of Finaccord, commented: “In terms of its overall value, the UK non-life insurance broking sector is both highly mature and competitive. Nevertheless, while the market might appear stagnant at first glance, it masks considerable dynamism at the level of the specific competitors in it.”
In addition to quantifying the value of the market, the latest research also ranks the top 60 brokerages in both commercial and personal lines broking according to their fees and commissions generated from these activities in 2014.
This data shows that the top three commercial lines brokers controlled 36 percent of the UK market in that year, and the top ten controlled 65.4 percent of it. The equivalent percentages for personal lines brokers were 32.4 percent for the top three and 63.4 percent for the top ten.
However, while there has been a clear trend towards consolidation in commercial lines broking in recent years, it has been much less evident in personal lines broking.
Finaccord’s analysis suggests that the UK non-life insurance broking sector will struggle to deliver much in the way of organic growth up to 2018.
With a total forecast value of £4.69 billion in 2018, it will continue to decline in real terms as a result of both the limited scope for expansion of underlying non-life insurance markets, and the fact that brokers will find it difficult to increase their distribution share in either commercial or personal lines.
