Gibraltar COR 4.4 points better than UK’s despite reserve hikes

Gibraltar-based motor insurers performed better than their UK-domiciled peers in 2012 according to analysis from accounting firm Deloitte.

The collective combined operating ratio (COR) for Gibraltar-based firms was 100.3%. This is 4.4 percentage points better than the UK COR, despite companies having to strengthen reserves against rising bodily injury claims.

Also, Gibraltar firms’ premium income grew by 9.2% in 2012, compared with a 1.5% slump among UK-based motor insurers.

Gibraltar motor insurers wrote £2.6bn of premium in 2012, which accounts for roughly 16% of total UK motor premium.

According to Deloitte, the study demonstrates the importance of Gibraltar-based insurers in the UK car market.

Deloitte insurance partner Ian Clark said: “The net combined ratio for the Gibraltar market in 2012 was 100.3% – 4.4% better than the equivalent figures for the UK market. This was despite several companies topping up their claims reserves for the deterioration in bodily injury claims between 2005 and 2010.

“There are about 10 companies operating in Gibraltar with net combined ratios below the 100% level, compared with only seven in the UK. Many of the Gibraltar insurers write niche non-standard books of business that have been less affected by the price war in the mainstream UK market and this is reflected in their results.”