Best’s Market Segment Report: AM Best Maintains Negative Outlook on U.K. Non-Life Insurance Market | Financial Buzz

Best’s Market Segment Report: AM Best Maintains Negative Outlook on U.K. Non-Life Insurance Market

AM Best is maintaining a negative market segment outlook on the United Kingdom non-life insurance segment, citing economic uncertainty as a key headwind for U.K. non-life insurers. Additionally, COVID-19-related lockdown measures coincided with the country’s preparation to leave the European single market, and together contributed to the biggest economic contraction since records began. This is expected to maintain pressure on premium income. Strong competition and claims inflation also are likely to dent technical results in the motor line of business, which accounts for approximately a third of U.K. non-life premiums.

A new Best’s Market Segment Report, “Market Segment Outlook: U.K. Non-Life Insurance” also cites increased regulatory scrutiny of pricing practices for home and personal motor insurance and ongoing exposure to weather-related events as factors weighing on the outlook.

Somewhat mitigating these negatives is the planned implementation in May 2021 of whiplash reforms contained in the Civil Liability Act 2018, which should have a positive impact on claims costs. The exclusion of communicable diseases, including COVID-19, from business interruption policy extensions written since the outbreak of the pandemic is another moderating factor.

William Keen-Tomlinson, AM Best senior financial analyst and report author, said: “The underlying technical performance of the U.K. non-life market remains relatively weak, characterised by significant competition, particularly pronounced on the retail side.”

Despite underlying challenges, AM Best expects risk-adjusted capitalisation in the segment to be resilient. Factors that may lead to AM Best revising this outlook in the future include reduced economic uncertainty and a sustainable improvement in underwriting performance.

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AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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William Keen-Tomlinson, ACA

Senior Financial Analyst

+44 20 7397 4395

Richard Banks

Director, Industry Research – EMEA

+44 20 7397 0322

Ghislain Le Cam, CFA, FRM

Director, Analytics

+44 20 7397 0268

Edem Kuenyehia

Director, Market Development & Communications

+44 20 7397 0280