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Association of British Insurers23UK Insurance &Long-Term SavingsKey FactsDecember 2018abi.org.uk@BritishInsurersAssociation of British InsurersOne America Square, 17 Crosswall,London EC3N 2LBT: 020 7600 3333 I f-british-insurers

4The ABI is the voice of the UK’s world leading insurance and long-termsavings industry.A productive, inclusive and thriving sector, we are an industry that providespeace of mind to households and businesses across the UK and powersthe growth of local and regional economies by enabling trade, risk taking,investment and innovation.The UK insurance industry is the largest in Europe and the fourth largest in theworld. It is an essential part of the UK’s economic strength, managing investmentsof 1.8 trillion and paying nearly 12bn in taxes to the Government. It employsaround 300,000 individuals, of which around a third are employed directly byproviders with the remainder in auxiliary services such as broking.Each year the ABI publishes a summary booklet of the UK insurance industry.This booklet provides facts and figures on 2017 (unless otherwise stated andwhere available) about UK insurance1 and its significant contribution both to theeconomy and society.1Top 10 Key Facts1The UK is the 4th largestinsurance & long-termsavings provider in theworld and the largest inthe EUContents4124There are 303,500people employedin the UK insuranceindustry612181924262728Top 10 Key FactsInsurance & long-term savings: a UK success storyInsurance & long-term savings: households and types ofproductsGeneral Insurance StatisticsInsurance & long-term savings: how they work for youGeneral Insurance FraudLong-term Savings and Life StatisticsHow Customers Purchase Insurance ProductsInsurance & long-term savings: Important role as investorsContactsAbout the ABIabi.org.uk@BritishInsurers1 Unlessstated, data is ABI data and covers ABI data providers only.303,5007 5.7bn was withdrawnfrom pensions23UK insurers contribute 29.5bn to the UKeconomyABI Members hold over 1.8trn invested assets 29.5bn5 1.8trn6 43.3m 43.3m was paid outeach day in motor &property claims815mOver 15 millionemployees contributedto a workplace pensionin the UK in 201510 1.3bn 1.3bn fraudulentclaims detectedTravel insurers paidout 385m claims totravellers who neededhelp whilst they wereabroad998% of protectionclaims presented werepaid out

23Insurance &long-term savings:a UK success storyBreakdown of worldwide premium income by country, 2017Total Premium Income, bn, 2017United StatesPR ChinaJapanUnited ber of authorised lifeinsurance companies inthe UK, of which 159 areUK authorised and 178 areheadquartered in anotherEuropean country andpassport in under Freedomof Services.Number of authorisedgeneral insurancecompanies in the UK,of which 281 are UKauthorised and 591 areheadquartered in anotherEuropean country andpassport in under Freedomof Services.In the UK, 94,200 aredirectly employed byinsurance companies and209,300 are employedin auxiliary services toinsurance and pensionfunding; such as broking,& third party services.44Long-term savingsprovidersTotal premiumTotalPremiumVolumeVolume2017 (USD2017(USDbillions)billions)No Data0 5050 100100 200200 400400 800Non-lifeGeneral insurersThe UK has the largestinsurance industry inEurope and the fourthlargest in the world.2800 140023.4%The UK insurance andlong-term savingsindustry generates justunder a quarter of totalEU premium income.3employees 11.8bn 29.5bn61st7taxes paidIn 2014 the sectorcontributed nearly 12bn in taxes to the UKgovernment.5contribution to theeconomyIn 2016 the UK insuranceindustry contributed 29.5bnto the UK economy.2 Source: Swiss Re, Sigma No 3/20183 Source: Insurance Europe, European Insurance Key Facts 2018abi.org.uk@BritishInsurers4567Source: Bank of England, July 2018Source: Blue Book 2018, Office for National StatisticsSource: PWC, Total Tax Contribution of the UK Insurance Industry, 2014Source: Office for National Statistics “Business Register and Employment Survey” 2017

45Insurance &long-term savings:households andtypes of productsOf the 26.6 million households in the UK in 2016-17: 19.6 million had contents insurance20.1 million had motor insurance16.9 million had buildings insurance3.1 million had mortgage protection1.9 million had private medical insuranceAnd for long-term savings products: 5.3 million had whole of life assurance2.2 million had a personal pension0.5 million had term life assurance0.3 million had income protection8 Source: ABI Analysis, Office for National Statistics, Department forEnvironment, Food and Rural Affairs. (2018). Living Costs and Food Survey, 2016-2017.Note that the ‘personal pensions’ figure excludes any occupational pensions.abi.org.uk@BritishInsurersHousehold holdings & expenditure on insurance and long-term savingsproducts, 2015-16 ncomeprotectionWhole ofLifeFixed TermLifePetInsurancePropertyStructureMedian annual household expenditure ( , excludes households with no expenditure)Households with expenditure (%)PropertyContents0%

67General Insurance StatisticsMOTOR INSURANCE 269m 29m 471underwriting profitpaid per dayaverage premiumThe 269m underwritingprofit in 2017 was asignificant increase onthe 909m underwritingloss in 2016, and the thirdtime that the UK motorinsurance market made aprofit since 1994.Insurers paid out 29m perday in motor claims of which 21.7m was for domesticclaims and 7.3m related tocommercial claims.By Q3 2018 the averagemotor premium for privatemotor had fallen from itsall-time high of 495 (Q42017) to 471.500450400350250In private motor, 98.4%of the total numberof claims made wereaccepted in the 2016/17period, similar to theprevious yearWhilst average claims forbodily injury are high, theoverall average for all types ofprivate car claims was 2,952.150100500Q4 2017Q1 2018Q2 2018Q3 2018average Bodily Injury claim200Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017claims acceptance@BritishInsurers 55030098.4% 10,347abi.org.ukAverage premium paid for private motor insurance**the average amount paid for a fully comprehensive policy where the policy holder holds a full driving licence

89PROPERTY INSURANCE 420m 14.3m 307underwriting profitpaid per dayaverage premiumFollowing benign weather,the UK property insurancemarket made its sixthunderwriting profit since2011.Insurers paid out 14.3mper day in propertyclaims of which 7.8mwas for domestic claimsand 6.5m related tocommercial claims.In Q3 2018 the averagepremium for a combinedbuilding and contentspolicy was 307, comparedto 306 in Q3 2017.Domestic Property Insurance Claims, by type of ClaimFire & explosion 17%Theft 16%Weather 8%Escape of water 31%Domestic subsidence 4%Accidental damage 12%Other domestic claims 13%*Percentages based on value of gross claims incurredAverage premium paid for domestic property insurance* 350340330320310300290280Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018270*the average amount paid for a combined buildings and contents policyabi.org.uk@BritishInsurers

1011TRAVELINSURANCEMEDICAL EXPENSEINSURANCELIABILITYINSURANCEPETINSURANCEpaid per dayGWPunderwriting profitcustomers 1.1mIn 2017, travel insurerspaid out 385m for 510,000claims to travellers whoneeded help whilst theywere abroad. 201m ofthis was to cover the costof emergency medicaltreatment, and 145m forcancellations. 3.3bnThe Gross Written Premiumof ABI members’ MedicalExpense Insurance for 2017was 3.3bn. 57m3.8mThe liability insurancemarket made anunderwriting profit of 57min 2017, a big improvementon the 176m loss in 2016.Around 96% of petinsurance is for catsand dogs.paid per daypaid per day 7.5m 757average claim 2.1mEvery day, liability insurerspaid out claims of 7.5m,of which 1.57m was foremployer’s liability.TRADE CREDITBusinesses can take out trade credit insurance to protect themselvesagainst financial distress of a trading partner.12,842 617kpoliciesabi.org.uk@BritishInsurerspaid per day in claims12Insurance & longterm savings:how theywork for you

307 a yearHOME13PET14Daniel makes sure the house and contents areprotected by taking out property insurance.TRAVELThe Morgans make sure theirpet dog Barney is lookedafter in case he needsmedical treatment. 7.8m per dayThe average property insurers pay out torepair homes and replace contents.15The Morgans went on holiday to Spain recentlyand took out travel insurance to protect themwhilst they were away. 550k a day 2.1m per dayThe average travel insurers pay out to helppeople who need medical treatment abroad.The average pet insurers payout for veterinary treatmentfor pets.RETIREMENTJane saved for her retirement throughouther working life. Earlier this year,she tooksome of her pension as cash and boughtan annuity with the rest to ensure she hasan income throughout her retirement.23.9mnumber of individual pension policies in force.PROTECTIONMOTORLauren hurt her back a few months ago, buther employer has income protection insuranceand paid her a salary when she could not work.Lauren renews her carinsurance at an average cost ofabi.org.uk@BritishInsurers 471 a year 10,347The average bodily injuryclaim following an accident.abi.org.uk@BritishInsurers 13.9m every dayamount insurers pay out for protectionpolicies, including income protection, criticalillness and life insurance.LIABILITYDaniel owns a café in the town andmakes sure he is covered with liabilityinsurance should anything go wrong. 7.5m every dayamount liability insurers pay outto protect businesses.16

171819General Insurance FraudDetected Fraud - Value of Casesdetected fraud bnOver 112,000 detectedcases of attemptedclaims fraud in 2017 - an8% decrease in volumecompared to 2016.1.6 775m1.0Volume of fraudulentliability claims is down27% in 2017, with 19,000detected, and valued atover nsurers1.20.80.6PENSION 0090.22008liability fraudHalf of individual pensionpolicies were workplacepensions.2007 386mpolicies2006Fraudulent motor claimswere the most common,over 67,000 in 2017, andvalued at 775m.23.9m2005motor fraudPENSIONS1.42004 1.28bnLong-term Savings andLife StatisticsBetween 2012and 2018 certainemployees who are notalready in a work placepension scheme will beautomatically enrolledinto one.73%contributingemployees73%9 of employeeswere contributing to aworkplace pension in2017. This has increasedfrom 68% in 2016.21.2m10members of qualifyingschemesBy the end of July2018 there were 21.2memployees in qualifyingschemes, with 9.9m of theseautomatically enrolled.4.1mpolicies soldJust over 4.1 millionpension policies* weresold in 2015.9 ONS Annual Survey of Hours and Earning pension tables, UK: 2017 provisional results10 The Pensions Regulator, Declarations of Compliance July 2018*Includes personal and work-based individual pensions, master trusts and investment only pensions.

2021RETIREMENT INCOMEThe pension reforms announced in 2014 gave people more flexibilityaround how to access their pension pots at retirement. 5.7bnwithdrawnAn estimated 5.7bnwas withdrawn frompension pots through bothdrawdown payments andcash withdrawals in the yearfrom April 2017.INCOME DRAWDOWNIncome drawdown contracts allow you to take an income from your pensionpot while the rest remains invested. 9.2bninvested in drawdownIn 2017 9.2bn was investedin Income Drawdownproducts, with 102,000 newcontracts, this is an averageof almost 90,000 invested.This compares to 6.5bnand 85,000 contracts soldin 2016.ANNUITIESAn annuity can be purchased with a sum of money from a pension whichwill then provide an income during retirement.6.7mpension annuitiesin forceIn 2017, 14.7bn inpayments were made.abi.org.uk@BritishInsurers69,000annuity salesThere were 69,000 annuitysales in 2017, decreasingfrom 75,000 in 2016. Thetotal value of annuity saleshas increased slightly to 4.4bn.48%bought from existingprovider