03 Aug 2020
Posted in Insurance
Insurers’ H1 financial results show motor insurers fare better in the short term, says GlobalData
RSA and Direct Line have posted positive H1 2020 results despite COVID-19 due to being active in the motor market, according to GlobalData.
GlobalData’s 2019 UK Insurance Consumer Survey found that Direct Line is the third largest motor insurer in the UK, in terms of customer numbers, with a share of 8.1% of the market. Similarly, GlobalData’s UK Top 20 General Insurance Competitor Analytics ranked Direct Line as the leading insurer in terms of GWP in 2018, while RSA was ranked at eighth in the UK in 2018 in terms of GWP.
Furthermore, GlobalData statistics show that Direct Line had 50.3% of its UK premiums in private motor insurance in 2018. RSA only had 11%, but it had 25.9% in private household, 22.8% in commercial motor and 12.8% in commercial motor. This means it is also sheltered from particularly risky lines of life insurance and business interruptions.
GlobalData insurance analyst, Ben Carey-Evans commented: “It is clear that insurers operating in property insurance – and especially motor insurance – will fare better in the short-term. With the majority of consumers working from home, they are both more likely to spot potential dangers around the house such as leaks early, and will be less likely to drive to work. The severe lockdown period in H1 meant people rarely drove anywhere, which has caused the significant reduction in claims.
“However, while insurers in these lines will see the benefits in 2020, there is a significant longer-term risk. People have become used to working from home, and many will continue doing so for the rest of the pandemic, and beyond. This means motor, and potentially even home insurers, will almost certainly see renewal rates drop. People who no longer need to drive to work may feel they do not need to have a car and all the costs associated with it.”