Driving For Profit: A View of the UK Private and Commercial Motor Insurance Markets 2014

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By Derek Newton, Gary Wells, Jeffrey A. Courchene, Vincent Robert | 27 July 2015

In the 2015 edition of Driving For Profit, we review some of the statistics behind the recent performance of the UK Private and Commercial Motor Insurance Markets.

Starting with UK Private Motor, the overall performance of the market in 2014 has resulted in a pre-tax net insurance ratio of 0.5%. Historically this ratio has been highly distorted by material releases or strengthening of prior years’ reserves held by the Direct Line Group. Excluding the Direct Line Group, the figures indicate that the market in aggregate is operating at a slight loss with a pre-tax net insurance ratio of -0.7% in 2014.

The overall performance (including reserve releases from prior years) of the UK Commercial Motor Market has improved in 2014 to a pre-tax net insurance ratio of -1.4% (from -8.3% in 2013). The causes of the better performance in 2014 were twofold: improvement in the operating loss for current year business and releases from prior years’ reserves. However, here too the results have been affected by historical prior years’ reserve movements relating to the Direct Line Group. Excluding the Direct Line Group, the market shows an overall pre-tax net insurance ratio of -0.5% in 2014.

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Insurance