Life - Articles - Premium income forecast to slow over next three years


UK non-life insurance premium income growth forecast to slow to 7% in 2024 (from 8.7% in 2023), 5.1% in 2025 and 3.8% in 2026. UK life insurance premium income growth forecast to slow to 5.9% in 2024 (from 6.9% in 2023), 4.7% in 2025 and 4% in 2026.

 UK insurers are expected to report slowing premium income growth over the next three years, according to the latest EY ITEM Club Outlook for Financial Services, as inflation continues to fall.

 Demand for non-life insurance products on the rise
 While falling inflation is likely to mean that increases in insurance premiums will be smaller, it should prompt a wider rise in real incomes, which would support greater demand for big ticket, insurable items. Overall, income from non-life insurance premiums is forecast to grow at 7% this year.

 The biggest drivers of non-life premiums are motor and home insurance. In the first three months of this year, new car sales were up 10% year-on-year, as consumer sentiment rose and parts and labour costs fell. And, on the property side, the prospect of interest rate cuts is expected to drive further recovery in the housing market, boosting demand for associated insurance.

 While growth is reasonably strong this year, the EY ITEM Club expects it to slow from 2025, to 5.1%, and fall further to 3.8% in 2026 as insurance premiums, particularly on the motor side – which had risen sharply over the last year due to inflationary pressures – begin to rise less quickly as inflation falls back.

 Life insurance premium income growth to slow over the next three years
 Demand for life insurance products will benefit from a forecast improvement in household incomes and faster-than-expected increases in the total UK population and those aged over 60. However, the strong growth in workplace pensions since autoenrollment began in 2012 is beginning to level off. As a result, the EY ITEM Club expects life insurance premium growth for UK insurers to fall from 6.9% in 2023, to 5.9% in 2024, 4.7% in 2025 and 4% in 2026.

 Martina Neary, UK Insurance Leader at EY, comments: “The economic environment has been enormously challenging for insurers and customers over recent years. While we are at last beginning to see steps towards sustainable economic recovery, these steps are still quite small and market uncertainty remains a concern.

 “Inflation is currently falling, so customers should start to see their product premiums rise more slowly. For insurers though, growth in non-life and life premium income is expected to slow over the next three years, making it ever more crucial that they keep a careful eye on their costs and explore other avenues of revenue growth.”
  

Back to Index


Similar News to this Story

Insurers must closely monitor impact of vaping on mortality
Insurers should start differentiating between vapers and smokers, so that they can gather data and insights, in preparation for when more is revealed
IPT receipts hit GBP4.42bn in first five months of 2024
IPT receipts hit £4.42 billion through the first five months of 2024/25 according to the latest HMRC data released this morning, exceeding the same pe
Covid19 leading to longest era of peacetime excess mortality
Report suggests potential excess mortality in the general population of up to 3% for the US by 2033 and 2.5% in the UK, the longest period of elevated

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.