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The two faces of Gibraltar’s insurance market

Contrasting pictures of the Gibraltar-based insurance market have emerged over the past few weeks – from the highs of Hastings growth to the lows of Enterprise’s collapse – shining a spotlight on “the rock” and its impact on the UK market.

On the one hand, research has found Hastings to be the UK’s fastest growing motor insurance brand, while only last month Enterprise was the latest insurer from Gibraltar to announce it was insolvent.

Research conducted by Consumer Intelligence and posted by Insurance Times suggests that Hastings’ change in market share pre- and post- renewal was 0.8pp, the greatest in the UK market. 90% of Hastings’ motor insurance business is placed with its Gibraltar-based underwriting wing Advantage Insurance Company, which accounted for £496.2m in 2014, its last available financial return.

It has been joined – as an insurer highlighted for finding business growth – by Admiral which also houses a large portion of its underwriting in Gibraltar and sits as the British Territory’s largest insurer.

The findings leave a market asking just how much influence the Gibraltar insurance industry has in the UK. In our latest report Uncovering the Insurance Market in Gibraltar 2016, it’s estimated that Gibraltar players account for some £2.6bn in UK motor insurance (commercial and personal lines) where, by some margin, a majority of business is focused. Insurers here are expected to make up just under 20% of the UK’s motor insurance market.

Also raising the question of Gibraltar’s market impact, but on a less positive note, is the news of Enterprise Insurance’s demise. Here, the Financial Services Compensation Scheme has stepped in to pay any loss in coverage.

Enterprise stood, as of 2014, as one of the top 10 insurers by size in Gibraltar with GWP of £146m. The collapse reflects an expectation over the last few years that the Gibraltarian market would consolidate and drop a few players as the Solvency II regime was established there. The market may end up smaller overall, and with fewer names, but ultimately it will be stronger. However, it remains to be seen how players with significant foreign business will fare through UK’s exit from the EU.

Gibraltar-based insurance remains an important piece of the UK insurance market story and should remain on the radar.

By Stewart Mcewan, Head of Content, UK General Insurance 

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