SchemeServe, a leading cloud-based provider of insurance software, has today released the latest results of its bi-annual Index, tracking trends and performance of the insurance schemes market.
The data, covering the six-month period 1st October 2020 through to 31st March 2021, has revealed significant movement across lines during the period, with Cyber the clear winner, with challenges evident for Car Insurance, Contractors All Risks (CAR) and Employers’ Liability.
Cyber was by far the best performing scheme. In the pervious Index, SchemeServe revealed that Cyber policies on its platform saw new business volumes rise 180%, GWP increased by 250% and average commission at renewal doubled. In this period that growth has continued, volumes in the period were up 126%, GWP was up 56% and commissions up 208% on the previous 12 months.
Adam Bishop, CEO of SchemeServe, comments: “Cyber was tipped to be a growth area in previous SchemeServe Indexes and we’ve not been disappointed. It is probably fair to say that cyber has been fuelled by the demands of the pandemic with the huge increase in homeworking and heightened awareness of cyber risks.”
Caravan & Trailer schemes also enjoyed a continued boom. First premium volumes were up 255% in the previous Index and up 100% again in this latest period. Renewal volumes were up 23%, showing increased demand possibly from the popularity of staycations as a result of the pandemic with fewer people able to travel abroad. Premiums were up 24% and commissions up 28%.
In the April 2020 to Sept 2020 Index, per policy, Residential Property Owners’ was by far the biggest earner over the period. It scored high on new business volumes and good commission levels at first premium, as well as good overall average commission levels, making it the most profitable scheme for brokers and MGAs. In this period, Residential Property Owners’ stayed the same, but Commercial Property Owners’ has seen an overall volume increase of 20% compared to last year, with first premium volumes up 14% and renewal volumes up nearly 30%. Is this indicative of businesses planning a return to work? There was also a housing boom last year, so could these figures also reflect high numbers of commercial landlords purchasing new housing rather than residential purchases? Commercial property premiums have also gone up 36% on last year, indicative perhaps of the hard market and unoccupancy levels during lockdown.
Contractors All Risks (CAR), is perhaps the biggest mover in this Index. The strongest performer at the start of 2020, in the latter half of 2020 it delivered £1.5m in commission from £10m GWP giving a 15% commission rate at renewal, down from 22.5% at the start of that year. This decline has continued and in this latest 6-month period, the data has fallen off a cliff. Total commissions are down 85% on the previous 12 months.
Looking at Car insurance, volumes have dropped with first premium volumes down nearly 20%, and renewal volumes down 42% with commissions down 100% on last year. With EL, volumes were static, but premiums have dropped off and commissions are down too at 32% and 37% respectively.
Adam Bishop, comments: “There was a huge drop in renewal volumes of CAR as contractors were unable to work initially during the first lockdown, and an increase in first premium volumes as people were able to get back to work. Could this be a market opportunity for brokers now as we come out of this lockdown?
“The decline for Car Insurance is not that surprising during the pandemic as people have been using their cars less and so many more declared off the road. According to stats from the DVLA, there were 67% fewer registrations in the UK during Q2 2020 compared to Q2 2019. Our clients have real time access to all the data on the SchemeServe platform and continue to analyse it to track these and many other evolving trends with interest.”
The data comes from the SchemeServe Premium Index which is a bi-annual pulse check on the Schemes market. The only insurtech with a 20-year heritage, SchemeServe now works with most of the leading schemes brokers and insurers. It designs and operates schemes for brokers, insurers and MGAs via its cloud-based platform. It offers an agile platform for operating delegated authority schemes, allowing them to get schemes up and running in a matter of days and make any updates (rate changes, changes from regulatory demands, or launch new products, for example) quickly and securely.