UK Insurance Premium Income

The UK Insurance industry is an important contributor to the UK overall economy, it is a major employer within the UK and a significant source of overseas earnings.  It helps businesses and individuals protect themselves from risk and provides a wide range of services

The UK insurance industry:

• is the largest insurance market in Europe
• is the third largest market in the world
• employs circa 354,000 people, a third of all financial services jobs
• accounts for 20% of investments in the stock market
• pays out £247 million a day in pension and life insurance benefits 
• pays out in the region of £50 million a day in general insurance claims

• UK insurance exports (defined as premiums minus claims) amount to just under £4 billion a year, this is  equivalent to over a third of total UK food, beverage and tobacco exports, or just over a quarter of the value of UK oil exports.
• Every day in the UK insurance companies pay out over £125 million in pension benefits to individuals. This compares to the £115 million that is paid out daily by the UK Government in state pension provisions.
• Insurance companies are the largest domestic owners of UK shares – owning 20% of UK ordinary shares. This compares to 16% held by company pension funds, 2% by unit trusts and just under 10% by other financial institutions.

The Structure of the UK Insurance Market

There are currently 806 insurance companies  authorised, either by the UK or by another European Economic Area member, to transact  insurance business in the UK.

Almost 600 of these transact on general Insurance business only (such as motor,travel household and commercial insurance), 160 companies are authorised to transact long-term Insurance  business only (such as life insurance and pension scheme business) and 54 companies  are classed as composite Insurers (in that they are able to transact  both general and life insurance business.).

The largest ten motor vehicle  insurance companies handle 87% of  business. Similarly, the largest ten property insurers account for 85% of the market share. The long-term insurance market is not as concentrated as other sectors of the Insurance Industry. With the 10 largest  Insurance companies accounting  for a total 68% of the market.

The British insurance industry is the largest in Europe, and the third largest in the world, accounting for some 9% of total worldwide premium income. The UK life insurance market is the largest in Europe and the third largest in the world, while the non-life insurance market is the second largest in Europe and the fourth largest in the world.

UK premium income as a percentage of GDP is the highest in Europe and the second in the world rankings. 

Overseas Business

Nearly a quarter of UK insurance companies' net premiums is derived from overseas business including from UK companies' subsidiaries overseas.  Premium income from overseas business is £35 billion, of which long-term business accounts for £25 billion, and non-life business £10 billion.  The total, including specialist insurance underwritten at Lloyd's, is even larger.