The UK employers liability insurance market continues to be characterized by overcapacity and unprofitability. While underlying demand for employers liability has steadily increased in recent years, premium rates continue to lag behind claims inflation. In the wake of the uncertainties created by the Brexit vote and the governments personal injury reforms, the market could be in for a turbulent few years.
UK employers liability market gross written premium grew by 1% in 2015, hampered by tough underwriting conditions in a competitive market. Premium rates are currently reported to be largely flat to slightly negative across the UK as a whole.
Employers liability remains unprofitable; the sector has not made an underwriting profit since 2005. The market continues to be propped up by reserve releases, which are showing no signs of slowing down.
The level of claims inflation has reduced due to the success of LASPO and fixed recoverable costs. However, this is likely to be temporary, and inflation for catastrophic losses remains above 10%.
The number of accident and disease employers liability claims recorded fell significantly in 201516 (-16.3%) due to a reduction in the impact of the LASPO spike, the start of a decline in noise-induced hearing loss (NIHL) claims, and continued improvements in workplace health and safety.
However, disease claims settled are yet to show any signs of falling (+29.1% in 201516), reflecting the greater length of time it takes to settle disease claims and the time lag before insurers will feel the impact of any reduction in NIHL claims recorded.
Verdict Financials UK Employers Liability Insurance 2016: Market Dynamics and Opportunities tracks the health and the shape of the market, taking into account market size, profitability and performance ratios, and the claims environment. Bringing this to life, the context of the UKs economic growth, business landscape, and the impact of a post-Brexit environment are all taken into consideration to build a full picture of this space. Key announcements, shifts in the market, and likely future changes are analyzed for impact across all relevant stakeholders.
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