22 Jun 2020
Posted in Insurance
UK personal lines insurance to experience large declines in 2020 due to COVID-19, says GlobalData
The personal lines market in the UK will contract in 2020 as a result of COVID-19 impacting a range of different lines of business. Travel insurance will be the worst affected personal lines product in the UK, says GlobalData, a leading data and analytics company.
GlobalData’s UK Insurance Market Essentials: COVID-19 Update report forecast suggests that the gross written premiums (GWP) will contract by 48.7. GlobalData expects it to be a short-term hit; however, it forecasts strong GWP in 2021 and 2022. Subsequently, the growth should then return to more normal levels in 2023.
Daniel Pearce, Senior Insurance Analyst at GlobalData, comments: “Trips abroad by UK residents have been largely on hold since the lockdown measures came into effect. Two-week quarantines periods for those entering the UK from almost all foreign countries will limit any hope of a recovery in the summer season. We do expect the market to return to growth in 2021 and 2022, with large GWP increases in both the years. A combination of an increase in the number of trips abroad and the loss of the EHIC system will play a vital role.”
The impact of COVID-19 is also expected to have a significant impact on the distribution of products. The affinity channel, in particular, is expected to see its share decline.
Pearce concludes: “The affinity channel’s prominence within the travel market will see its share of distribution fall, while we expect to see the specialist advice provided by brokers become increasingly important. This is especially true within commercial insurance, where COVID-19 has highlighted the importance of understanding exactly what risks businesses are exposed to.”