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Spain non life insurance industry trends and opportunities to 2016

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					Spain Non-Life Insurance Industry Trends and Opportunities to
2016
The Spanish non-life insurance segment was highly competitive during the review period, and motor and
property insurance together accounted for more than 90% of the segment in 2011. Despite being the
leading category in Spanish non-life insurance, motor insurance registered a decline during the review
period at a CAGR of -3.8%, whereas property insurance registered marginal growth at a CAGR of just
0.5%. The Spanish non-life segment started to decline in 2009 due to the global financial crisis, which
continued in 2010 and 2011 due to the European debt crisis.

With the gradual economic recovery, increased per capita annual disposable income and the
implementation of Solvency II, by 2016 the Spanish non-life segment is expected to recover to the levels
recorded in 2007. The gradual recovery of the property market and foreign investment in infrastructure
are also expected to drive the growth of non-life insurance over the forecast period. Property insurance
accounted for the second-largest market share of the Spanish non-life insurance segment behind motor
insurance in 2011, and is expected to retain its position over the forecast period.

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Report Details:

Published: October 2012
No. of Pages: 252

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Domination of agencies

The distribution of Spanish non-life insurance is dominated by agencies, with a market share of 34.6% in
terms of written premium new business in 2011. During the review period, despite the large-scale
presence of the agency network, the gross written premium of agencies declined at a CAGR of -5.0%.
Over the forecast period, agencies’ market share is expected to decline further, although it is expected
to remain the leading distribution channel in the Spanish non-life segment. In terms of business
generation, the agency channel revenue is expected to decrease at a CAGR of -2.3% over the forecast
period.

Negative growth of motor insurance
The written premium of the Spanish motor insurance category fell during the review period due to a
decline in new vehicles sales. The number of new policies in the category also fell. Motor third-party
insurance accounted for 53.6% of the motor category in terms of gross written premium in 2011, as
third-party liability insurance is compulsory under Spanish law. As per capita annual disposable income
increases, the motor insurance category is expected to grow over the forecast period.

Growth opportunity from an underinsured market

The Spanish non-life segment is considered to be one of the underinsured segments in Europe. Non-life
insurance penetration in Spain as a percentage of GDP was 2.03% in 2011, lower than that of other
European countries such as France and the UK which recorded penetration rates of 2.33% and 3.0%
respectively. This represents an opportunity for Spanish non-life insurance, and is expected to drive the
segment over the forecast period.

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