Lessons from a far bigger non-life insurance market than ours
The biggest insurer operating out of the United Kingdom (UK) generated almost two times the gross written premium (GWP) delivered by the entire South African non-life insurance sector in 2024. It is number that illustrates the relative strength of the world’s sixth largest economy versus a country ranked nearer 40th. FAnews attended a recent Insurance Times UK webinar to learn more.
Underwriting excellence
Katie Scott, Editor at Insurance Times, introduced the online event as a discussion on underwriting excellence informed by the Top 50 Insurers Report, a ranking of UK- and Gibraltar-regulated insurers and Lloyd’s syndicates measured by gross written premium (GWP) in their 2023–2024-year ends. The annual report is produced by Insurance Times, and informed by Insurance DataLabs, who in turn rely on underwriting results contained in the annual Solvency and Financial Condition Reports.
Dan King, co-founder of Insurance DataLabs, was in attendance to share some of the report’s key findings. He wasted no time in listing the top five, starting with Aviva, which boasted GBP12.7 billion in GWP thanks to its acquisition of the Red Line group. “AXA remains in second place, with GWP of just over GBP7 billion, with Allianz remaining in third with almost GBP4.5 billion,” King said. The insurer in fourth position, rebranded from RSA to Intact, moved up nine places after its purchase of NIG and Farm Web. Admiral, up two places, rounded out the top five.
The Top 50 Insurers Report goes beyond top-line GWP numbers to give insights into the state of the UK insurance market. According to King, the top 50 insurers reported an aggregate combined operating ratio (COR) of 96.1%, marking a welcome return to underwriting profit. He noted that insurers outside the top 50 had done even better, with a COR of 95.2%. The UK insurance market, Lloyd’s, defines COR as “a measure of the profitability of an insurer’s day-to-day underwriting activity, being the ratio of claim-related losses, net of reinsurance, plus expenses to net earned premiums.” South African insurers often call this the combined ratio.
Niche, specialists to outperform
Delving deeper into the report findings, you discover that niche, specialist insurers enjoyed a profitability edge over larger underwriters; that the motor insurance product line was in loss-making territory in both the personal lines and commercial segments; and that the property product line was firmly in profit, especially for commercial. The discussion was joined by Lee Mooney, UK Managing Director at Markel, and Catherine Masters, Director of Pricing and Data at Covéa Insurance, who were asked for their thoughts on the underwriting environment.
“Underwriters are used to spinning a lot of plates and navigating through very complex environments,” Masters said, mentioning claims inflation, economic headwinds and regulation as some of the challenges facing insurers in 2024 and year-to-date 2025. She singled out agility as a core success factor and hinted that complexity had become part of the ‘business as usual’ paradigm. Mooney echoed these sentiments before reframing challenges as opportunities. He encouraged industry stakeholders to invest in talent and draw on their entrepreneurial flair to offer innovative, sector-specific solutions.
“How can insurers grow and improve their businesses sustainably against the various headwinds, and what does success look like?” asked Scott. Masters hinted at a “tale of two halves”, with large insurers offering diverse product suites at scale facing off against smaller specialist underwriters and new entrants to the market. She added that each firm would likely develop a unique approach to meeting customer demands and responding to operational and regulatory challenges.
How insurers can help brokers
Mooney listed service and underwriting consistency as operational differentiators for insurers. It is also important to leverage technology to make the customer journey nimbler and insurance solutions more accessible. The Markel MD was less sure about whether current levels of profitability were sustainable given the healthy rating environment in 2024 and the first half of 2025. “Profits cannot be sustained at this level, [meaning] we will have to think about other sectors and solutions and make sure we embrace the opportunity ahead,” he said.
The panellists noted that technology investment remained uneven across the UK distribution landscape. They said that many smaller brokers lacked the resources to match insurers’ digital ambitions. It was suggested that insurers support brokers by removing friction and offering scalable digital tools, with the consensus being that collaboration will define the next phase of digital transformation in insurance distribution.
The discussion turned to how artificial intelligence (AI) would be leveraged to deliver efficiencies through the back office versus being used in more technical areas like front-end underwriting and pricing. Mooney said the industry was already embracing AI and would continue to do so. AI has clear benefits in making sense of unstructured data and both reducing errors and speeding up administrative processes.
Unfortunately, there are negatives to its fast-tracked adoption, including the potential for job losses and the risks in overreliance on the technology. “How we interpret, navigate and utilise AI in an evolving industry is critical,” Mooney said. Insurers will have to be very selective in areas like underwriting, where a clear understanding of how the technology is being applied is indicated.
Applying AI to reduce friction
Masters reiterated that the application of AI was largely about the removal of friction. She said underwriters were working out how to achieve internal efficiencies to free up time for specialists on the one hand and to improve the customer journey on the other. Insurers must combine AI and data assets to enhance customer experiences while finding new ways to interpret risk.
“Our industry has existed for hundreds of years on the talents of underwriters who know exactly what they are doing,” she said. “This is a people-centric industry, and AI is not going to replace that anytime soon.” The subtext is that insurers will have to use AI with caution, always keeping humans in the loop. At present, the technology could find traction in commoditised, low-risk parts of the market, generating value at scale.
But the panellists agreed that it was too soon to talk of ‘throwing’ AI at the complex and considered decisions that underwriters typically get drawn into. According to Mooney, the aim of AI should be to get underwriters to spend more of their time on actual underwriting and providing advice and support to customers. The hope would be to increase the time spent on underwriting from 40% to 50% currently to 80% or more.
Use cases for complex decision making
AI and technology dominated the second half of the webinar, with the final question being about AI use cases for complex decision-making. An audience member wanted to know what conditions had to be met before a high-function AI solution could be approved. “For me, it is about explainability; we must be able to clearly articulate how we have come to a decision, whether a human is deciding or whether it is an AI tool or product,” Masters said. “This remains one of the biggest constraints for more use cases to be accepted.”
The key point here is that if an insurer cannot explain the AI solution, it risks breaking trust with its customers and partners. Mooney agreed wholeheartedly, saying that explainability, security and trust were non-negotiable when introducing new technology into the business.
Writer’s thoughts:
Today’s overview of the UK non-life insurance market shows how AI, data and human expertise can transform underwriting performances. Are South African brokers adapting fast enough to stay relevant in an increasingly digital insurance landscape? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
