SchemeServe, a leading cloud-based provider of insurance software, releases the latest results of its bi-annual Index, tracking trends and performance of the insurance schemes market. The data, covering the six-month period 31st March 2021 through to 30th September 2021, highlights the impact of Covid and the hard market, and identifies some potential areas for schemes growth.
The best three performing schemes in this period based on volumes, GWP and commission earnings were Professional Indemnity, Pubs & Clubs and Cyber.
Previously unnoteworthy in previous Indices, in this last 6-month period the Index for Professional Indemnity schemes has recorded a massive 69% increase in volumes, a 726% increase in first premium and 28% increase in renewal premium, and a 272% increase in commission earnings. Average premium recorded in this period was £1,811.92.
Pubs & Clubs have clearly bounced back from the pandemic in terms of insurance. Compared to the previous 6 months where premium volumes were down by almost 40%, volumes are now up by 71%, premiums are up 130% with the average premium at £4,636.45. Commission earnings are up by 136% on the previous 6 months.
Cyber continues to grow and outpace many other schemes, albeit at a slower rate than in previous Indices. In the last 6 months volumes were up 108%, premiums up 37%, reflecting continued rate hardening in this line of business, and commission earnings up 100% compared to the 208% increase witnessed at the start of this year. The fact remains that there’s a rising demand as more people understand the product and more brokers are comfortable selling it.
Adam Bishop, CEO of SchemeServe, comments: “With 20 plus years’ experience of hosting and managing online delegated schemes for the market for some of the leading specialist schemes brokers, MGAs and insurers, we have unique access to such granular and comprehensive schemes data. Our clients all benefit from direct access to this real time data to track schemes performance and trends. We’re delighted to be able to share this valuable data publicly with the market on a bi-annual basis to inform and further benefit the growth of the schemes market.”
One of the best performers in 2019/20, the numbers for Contractors All Risks (CAR) fell dramatically at the end of last year and beginning of this year. Since then total premium income for CAR has risen just 11% and Commissions are down 10%. The high cost and scarcity of building materials, combined with the fact that many self-employed contractors would still have been eligible for furlough up until recently, could all have contributed to this.
Adam Bishop adds: “CAR was a product tipped for growth in the last Index as it had previously topped the Index as one of the best performing schemes pre Covid. Whilst the indices have not yet regained the heady hights pre Covid, there’s every reason to expect this might return, making CAR a potential growth opportunity.”
Another potential area for come-back growth could be Property Owners’ schemes. A year ago in the April 2020 to Sept 2020 Index, per policy, Residential Property Owners’ insurance 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. It performed well again at the start of this year, but volumes, premiums and commissions have largely remained static since then.
In the last 6 months the Caravan & Trailer boom has continued with the popularity of staycations. Volumes were up 129% following an increase in the previous 6 months of 100%, making it the highest riser on volumes, followed by Cyber and Pubs & Clubs. Premiums were up again by 59% (average premium £290) and commission earnings were up 69%.
Adam continues: “It would be worth brokers bearing in mind some of these new ‘bounce-back’ growth area opportunities post pandemic. Good investors will be identifying commercial opportunities set to bounce back and brokers should be ready to capitalise in the right areas.”
Employers’ Liability notably continues to perform badly in this Index. Volumes were static, but premiums and commission earnings have dropped off again and by a much greater percentage in this last period by 53% and 44% respectively.
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.