Benchmarking cost structures is vital to understanding combined operating ratios (COR) and their effects on profitability and business performance. This brief analyzes the loss, expense, and COR of the UK household and commercial property market at an industry level, as well as the performance ratios for the top 10 household and commercial property insurers respectively.
Identify the key expense pressures facing the property insurance market.
Benchmark your performance ratios against those of major competitors.
Discover what actions the best performing insurers have adopted in improving operating ratios.
How do your performance ratios compare to the market average and the top 10 insurers?
Which of the markets top 10 insurers performed best in 2010?
How has the market as a whole fared on expense and loss ratios in 2010?
Due to the mild weather during 2011 the household insurance market has achieved a reported year COR of 89.2%, a drop of 9.6 percentage points on 2010.
While a 9.4 percentage point improvement was made to the household insurance market's loss ratio, insurers will be concerned at a rise in claims costs in a year largely free of weather events.
Soft rates are squeezing commercial property insurance books already running at unsustainable operating ratios. Meanwhile, the market's expense ratio increased by 2.4 percentage points in 2011 to 47.1%, demonstrating efficiencies in operations are not managing to adapt to tighter conditions.