UK motor 2024: hunting whales, and the case for better QRTs
Our market-wide study of 35 UK and Gibraltar motor insurers shows premium up 20% and combined ratios down from 111% to 89%. We also ask how far the regulatory returns can be trusted as a measure of profit.
Our updated analysis of the 2024 UK motor market now covers 35 firms based in the UK and Gibraltar, around 99% of market gross written premium. The 13 firms added since our May preliminary findings are mostly based in Gibraltar.
Key findings
- Premium grew by 20% in the direct UK motor market between 2023 and 2024.
- Combined ratios fell from 111% to 89%, and 24 of the 35 firms reported combined ratios below 100%, up from 16.
- Gibraltar-based insurers grew their share slightly, from 34% to 35%.
- Fastest growth: Tradex, whose premium rose from £183 million to £587 million. In absolute terms Admiral Gibraltar grew the most, adding £753 million.
More on the A-Team
For the first time we split the market into personal and commercial lines. The five largest personal lines insurers control around 71% of premium, and the five largest commercial lines insurers around 76%. As rates soften from their 2024 peak, it will be interesting to see whether these dominant firms can turn their scale into a clear performance advantage.
Can we have some better QRTs?
Unlike the PRA returns before them, Solvency II (and now Solvency UK) templates have never required firms to publish a regulatory profit and loss account. Treatment of other income and reinsurance commission, accounting bases and unallocated expenses all vary.
So we compared the combined ratios in firms' QRTs with the narrative figures many give elsewhere in their SFCRs. Our conclusions:
- On balance, QRTs give a reasonable measure of profitability for the market as a whole.
- The typical difference between the two is around 5 to 10 points, a useful rule of thumb for the effect of unallocated expenses and other income.
- For some firms, QRT combined ratios give a materially wrong picture, so care and experience are needed in reading them.
We are not hopeful that regulators will require fuller disclosure soon, so we encourage firms to provide voluntary disclosures in the meantime.
The whale chart
Our "whale chart" shows how profits and losses are shared across the market. In 2023 the bulk of the losses came from a small number of firms. Even in 2024, a few firms still did not report an underwriting profit.
