UK motor 2024: an overdue return to profit, and the rise of the A-Team
The rate increases of late 2023 finally reached the bottom line, giving motor insurers their best results in a decade. Meanwhile five groups now write around 60% of the market.
Our preliminary analysis of the 2024 UK motor market draws on the regulatory disclosures of the 22 firms that published earliest, together over 80% of the market by gross written premium.
2024 brought two developments: consolidation at the larger end of the market, and an upswing in profitability.
Key findings
- Premium grew by 25% between 2023 and 2024.
- Combined ratios fell from 109% to 87%, the best results of the last decade. 18 of the 22 firms reported combined ratios below 100%, up from 10.
- Gibraltar-based insurers are expected to write around 35% of UK motor premium, up from 34%.
- Capital: the median Solvency Ratio rose by 16 points to 174%.
Which way for the A-Team?
Following the acquisitions of DLG, esure and Acromas, five groups now account for around 60% of the market, up from 53%. We call them the A-Team: Aviva, Admiral, Ageas, Allianz and Advantage (the Hastings carrier).
Whether consolidation continues may depend on three questions:
- Can these five use their scale, through better customer insight and streamlined claims handling, to drive down costs and compete on price?
- Could the Consumer Duty, with its stronger consumer protections, end up reducing competition and pushing up prices for motorists?
- How will competition authorities react, and will any review look only at the point of sale or at the whole value chain?
An overdue return to profit
At last, the rate increases of late 2023 have fed through to the bottom line. Combined with a relatively benign claims environment, the market combined ratio fell by 22 points. Firms that timed their growth to catch the hard market will have been well rewarded.
A note on Solvency UK
2024 is the first year reported under Solvency UK, so comparisons with 2023 need care. Risk margins have been cut by a third, lifting "profits", and the presentation of expenses has changed. In this report only allocated expenses are included in combined ratios.
We will extend the study to the remaining firms, many of them in Gibraltar, later in the year.
