United Kingdom (UK) Employers’ Liability Insurance Market Trends, Competitor Dynamics and Opportunities

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This report tracks the health and shape of the employers’ liability market – taking into account market size, profitability, performance ratios, and the claims environment. The UK’s economic growth, business landscape, and cost-of-living crisis are all taken into consideration to build a full picture of this space. Key shifts in the market and likely future changes are analyzed for impact across all relevant stakeholders.

The employers’ liability market is expected to grow by 9.2% in 2023, following strong growth of 25.6% in 2022. The increase in 2023 can be ascribed to rising premiums brought on by inflationary pressures and rising claim costs. The current economic conditions, which are marked by high rates of interest and inflation, have increased the expenses associated with conducting business. Along with the current recession the UK has entered, this may cause the unemployment rate to increase, hence having an impact on the employers’ liability market. The market is directly reliant on the number of businesses and employees in the UK, so this will have a negative impact on premiums. With the average cost of claims increasing, insurers will have to keep an eye on their pricing to ensure they do not lose out and maintain a strong underwriting profit. GlobalData forecasts GWP to reach GBP2.16 million by 2027.

UK Employers Liability Insurance Market Dynamics

Employers’ liability GWP increased in 2021, retaining strong underwriting profit and resulting in a positive year for insurers. COVID-19 has had a significant impact on businesses in the UK, both in terms of the number of enterprises and how they can function. Further impacts that the pandemic had on the employers’ liability market were the changes to working models, as well as the furlough scheme, which ended in September 2021. The scheme supported the employers’ liability market by allowing companies to keep their employees; as employers’ liability premiums are directly related to payroll, this allowed for GWP growth in 2021.

Furthermore, the Civil Liability Act has been put into effect following disruptions due to COVID-19. The Civil Liability Act 2021 is expected to lower the overall cost of claims for businesses while making it more difficult for claimants to bring successful claims against employers. It is crucial to remember that the Act is still very new, therefore its entire impact on employers’ liability claims has not yet been determined.

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UK Employers Liability Insurance Market – Competitive Landscape

The leading players in the UK employers liability insurance market are Chubb, AIG, AXA, Aviva, Zurich, Allianz, QBE, Berkshire Hathaway, Hiscox, and RSA. Chubb became the new leader of the general liability market in the UK in 2021. New technologies are enabling more creative and effective business practices in this age of digitization. Chubb has focused efforts on improving functionality and broadening the selection of products available through its eTrade platforms, making it easier for clients to attain insurance. It has also made investments in technology to enhance its offerings as well as the customer experience from end to end.

UK Employers Liability Insurance Market Analysis by Companies, 2021 (%)

UK Employers Liability Insurance Market Analysis by Companies, 2021 (%)

For additional information on the UK employers liability insurance market-leading players, download a free report sample

Scope

• The employers’ liability market is expected to grow by 9.2% in 2023, with GWP growing to GBP2.08 billion.

• The market experienced a good underwriting profit of GBP68 million in 2022, despite gross claims incurred increasing by 53.9% to GBP1.07 billion.

• The average claims cost increased significantly, rising by 70.2% from 2021 to a 10-year high of GBP18,682 in 2022.

• With a 9.1% market share, Aviva emerges as the top employers’ liability insurance provider in the SME sector, trailed by AXA (5.5%) and Zurich (4.8%).

Reasons to Buy

• Understand the context of the UK’s economic growth and business landscape in relation to the employers’ liability insurance market.

• Determine key announcements, shifts in the market, and likely future changes relevant to all stakeholders.

• Review your strategy against both existing and new challenges in this market.

• Benchmark yourself against the market’s experience of market size, growth, performance, and the claims environment.

Chubb
AIG
Zurich
Aviva
AXA
Allianz
QBE
RSA
Berkshire Hathaway
Hiscox
LV=
Simply Business
Lloyds Bank
Direct Line
NFU Mutual
Zego
Dinghy
Uber
Deliveroo

Table of Contents

1. Executive Summary

1.1 Market overview

1.2 Key findings

1.3 Critical success factors

2. Market Dynamics

2.1 Employers’ liability GWP is expected to have increased by

9.2% in 2023, following growth of

25.6% in 2022

2.2 Underwriting profits remain positive in 2022 despite a large increase in claims incurred

2.3 The average cost of claims continued to increase in 2022

2.4 The Civil Liability Act aims to reform personal injury compensation practices

2.5 The dynamic of working is reaching a plateau in terms of remote working models

3. Competitor Dynamics

3.1 Chubb maintains its position as the top provider of general liability insurance in 2022

4. The Market Going Forward

4.1 Employers’ liability is expected to have reached GBP2.08 billion in 2023 and then continue growing at a slower rate

4.2 Many factors will have an impact on market growth

5. Appendix

5.1 Abbreviations, acronyms, and initialisms

5.2 Definitions

5.3 Methodology

5.4 Secondary sources

5.5 Further reading

About GlobalData

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Table

Table 1: The number of employing private sector businesses and employees in the UK, 2016-23

Table 2: The number of employing businesses by company size, 2017-23

Table 3: The number of private sector employees and businesses by industry, 2022-23

Table 4: Employers’ liability ratios, 2017-22

Table 5: The total number of fatalities and injuries in the workplace, 2015/16-22/23p

Table 6: Leading UK general liability insurers by GWP (GBP 000s), 2021-22

Table 7: Employers’ liability market GWP forecasts, 2022-27f

Figures

Figure 1: The employers’ liability market is expected to have grown by 9.2% in 2023 following a 25.6% growth in 2022

Figure 2: The number of businesses in the private sector fell in 2023 following a tough economic environment

Figure 3: The majority of regions in the UK experienced a decline in the number of businesses

Figure 4: Underwriting profits for the market remain small given that claims increased in 2022

Figure 5: The average claims cost continued the upward trend and almost doubled in 2022

Figure 6: The number of non-fatal workplace injuries started to fall again in 2022-23p

Figure 7: The Civil Liability Act has seen the number of settlements fall since its introduction

Figure 8: Remote working remains up since the pandemic among different SME sizes

Figure 9: Chubb continued to grow its share of the UK general liability market in 2022, boasting a share of 10.3%

Figure 10: Aviva overtakes AXA as the most popular provider of employers’ liability for all SMEs

Figure 11: The top reason for SMEs switching provider is pricing considerations, growing by 9.1pp in 2023

Figure 12: The employers’ liability market is forecast to have a CAGR of 2.5% between 2022 and 2027f

Figure 13: One fifth of all SMEs do not have employers’ liability cover as they feel the risk to their staff is minimal

Figure 14: Forecasting methodology

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