Commercial lines sector feels pinch

Figures released by the Association of British Insurers (ABI) last week show a massive £1.1 billion dip in the value of commercial lines business being written in 1998 compared with the previous year.

However the share of the business placed by brokers increased from 76% to 81% – the highest since records began (see table). The figures, which exclude Lloyd's, are based on information supplied by the ABI's member companies.

It shows that in the calendar year 1998 the value of gross written premium on commercial lines business was £7.963bn compared to £9.052bn the previous year – a drop more than 11%. The ABI's Tony Baker said the figures proved that the commercial insurance market was "amazingly competitive and very difficult to get price increases through in."

He said the outlook for next year was equally dismal but that premiums would eventually harden due to higher claims costs.

The drop in commercial insurance contrasts sharply with a £709m increase in personal lines. This represents a 4.8% increase in premium income, from £14.14bn in 1997 to £14.849 in 1998. The level of business written by brokers fell slightly to 28%.

The 1998 figures show the industry attracted total premiums of £23.957 bn in 1998, a slight drop from the £23.331bn recorded in 1997.

The total general business, ie personal lines and commercial lines combined amounted to 23.951bn, a drop on the previous year's £24.331bn.

The percentage share of overall general insurance business placed through brokers remained static at 49%. A total of 16% was written by direct writersFigures released by the Association of British Insurers (ABI) last week show a massive £1.1 billion dip in the value of commercial lines business being written in 1998 compared with the previous year.

However the share of the business placed by brokers increased from 76% to 81% – the highest since records began (see table). The figures, which exclude Lloyd's, are based on information supplied by the ABI's member companies.

It shows that in the calendar year 1998 the value of gross written premium on commercial lines business was £7.963bn compared to £9.052bn the previous year – a drop more than 11%. The ABI's Tony Baker said the figures proved that the commercial insurance market was "amazingly competitive and very difficult to get price increases through in."

He said the outlook for next year was equally dismal but that premiums would eventually harden due to higher claims costs.

The drop in commercial insurance contrasts sharply with a £709m increase in personal lines. This represents a 4.8% increase in premium income, from £14.14bn in 1997 to £14.849 in 1998. The level of business written by brokers fell slightly to 28%.

The 1998 figures show the industry attracted total premiums of £23.957 bn in 1998, a slight drop from the £23.331bn recorded in 1997.

The total general business, ie personal lines and commercial lines combined amounted to 23.951bn, a drop on the previous year's £24.331bn.

The percentage share of overall general insurance business placed through brokers remained static at 49%. A total of 16% was written by direct writers