Economies of scale will protect top five GI players says AM Best
AM Best has said that underwriting profitability in the U.K. non-life market may not be sustained in the next year. The rating's agency said in its latest report: "The third largest market in the world, is dominated by these top five companies—Aviva, Royal Bank of Scotland Insurance, Royal & Sun Alliance, Axa and Zurich. In highly commoditised lines, such as personal motor and household insurance, A.M. Best believes larger companies are able to leverage economies of scale to gain a competitive advantage. However, opportunities remain for smaller, niche insurers, which can compete on service and, to some extent, are insulated from price-led competition.
Further rate reductions across most business lines are anticipated during 2007, although the pace of decline is expected to slow. This is consistent with A.M. Best’s view that underwriting performance
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