The motor class of business maintains its grip over the property and casualty market, with a premium growth that is admittedly low from year to year but that has been steadily increasing for the past ten years.
As in the case of the motor business, the non life personal lines class of business is experiencing a regular but more sustained growth, with an increase of 46.8% over the period under review.
In third place among the non life class of business comes the insurance of professional and agricultural property, which has witnessed a decline in premium income over the past three years.
Notably remarkable is the excellent development of the risks of legal protection, assistance, pecuniary loss and credit and surety, whose premium income in 2020 exceeds the one reported for professional and agricultural property insurance.
The construction and natural catastrophes sectors are slowing down, with premiums slightly declining over ten years for construction and slightly increasing for natural catastrophes.
Read also | French insurance market: results 2020 [4]
Evolution of property and casualty insurance premiums in France: 2019-2020
Despite a difficult economic and health context, the non-life activity remained relatively stable in 2020 with an increase of around 1% in underwriting. Premiums increased in the lines least impacted by the pandemic, such as motor (+1.3%) and property personal lines (+2.7%). Property insurance for professionals/companies is the only class of business having reported a decline of 1.2% in premium income.
In 2020, motor insurance accounted for most of the non-life business, with 23.1 billion EUR in premium income and a 39% market share. Overall, the motor business is only in third place with 11.5% of total premium income from all classes of business (life and non-life), trailing behind the life-capital and health-bodily injury categories.
In 2020, property and casualty insurance accounts for (1):
- 59.2 billion EUR in contributions,
- 42.9 billion EUR in claims payments,
- a gross loss ratio of 72.5%,
- 12 million claims,
- 32 610 claims per day, including 19 200 motor claims (-19% compared to 2019), 9 750 homeowners claims (-4%) and 3 660 business risk claims (+26%).
(1) Figures from the French Insurance Federation
Read also | France: evolution of non-life premiums per class of business [5]
Non-life insurance premiums per company: 2019-2020
The property and casualty insurance market is largely controlled by the mutual insurance groups, Covéa, Groupama, MACIF, MAIF, Matmut, etc., which dominate the personal lines segment.
Historically present on the market thanks to their proximity network, these groups have been able to renew their image and attract an increasingly younger population of policyholders. The mutual companies, in the top 10 of 2020, account for nearly 44% of total property and casualty premiums.
In terms of premiums, at the top of the ranking is Covéa, which, with its 9.5 billion EUR, stands as a solid leader in the non-life market. The Covéa group, which includes three entities: MAAF, MMA and GMF, controls 16.15% of the property-casualty market, well ahead of AXA, Groupama and Allianz.
Read also | Ranking of non-life insurance companies in France [6]
Non-life insurance in France: property and casualty incurred losses
During the 2010-2020 period, the highest loss experience has been reported in the professional and agricultural property and natural catastrophes classes of business, with respective growth rates of 129% and 121%.
The slippage in the 2020 loss experience of these two classes of business was slightly offset by the loss experience gains achieved in motor and personal property.
The evolution of the motor expense over time is 12.2% while the premium progression over the same period is 26.2%, that is, a loss ratio improvement of 14 points in 10 years.
Incurred losses: 2019-2020
For the property and casualty market as a whole, incurred losses have grown faster (+2%) than the premium income (+1%).
In 2020, non-life insurers managed 12 million claims, or 32 610 per day. The health crisis has led to a significant drop in the number of claims in the personal lines risk, motor and homeowner’s classes of business. On the other hand, claims from professionals and businesses increased significantly, with a 26% year-on-year rise.
Expressed in amount, the incurred losses of professional and agricultural risks have increased by 70.9% in one year, from 5.5 billion EUR in 2019 to 9.4 billion USD in 2020. This increase is largely due to claims for business interruption and cancellation risks.
Natural catastrophe claims have also inflated the insurers' bills in the past year, making 2020 the most expensive year after 2017. Storm Alex in October 2020 and the floods in the Southeast set the industry back 3.1 billion EUR, hence the 40.9% increase in natural catastrophe claims in one year.
Property and casualty insurance in France: combined ratios
The combined ratio for the period 2010-2019 (1) fluctuates between a high of 98% in 2010 and a low of 93% in 2011. Due to the health crisis and the deterioration of the socio-economic environment, the 2020 ratio, not yet published by the French Insurance Federation, is likely to reach 98%, hence the likelihood of its return to its 2010 level.
Property and casualty insurance in France: evolution of main highlights (2010-2020)
In billions EUR| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
Gross premiums | 45.5 | 48.4 | 48.7 | 50.2 | 51.2 | 52.4 | 53.3 | 54.6 | 56.2 | 58.6 | 59.2 |
Incurred losses | 34.2 | 33.2 | 35.1 | 35.9 | 36.9 | 36.5 | 38.5 | 39.1 | 39.2 | 42.1 | 42.9 |
Gross loss ratio | 75.20% | 68.60% | 72.10% | 71.50% | 72.10% | 69.80% | 72.30% | 71.70% | 69.70% | 71.90% | 72.50% |
Management expenses ratio (1) (2) | 22.80% | 24.40% | 21.90% | 23.50% | 23.50% | 23.70% | 24.00% | 24.30% | 24.50% | 24.80% | ND |
Gross combined ratio (1) | 98% | 93% | 94% | 95% | 95.60% | 93.50% | 96.30% | 96% | 94.20% | 96.70% | ND |
(1) ratio not available
(2) Acquisition and management expenses
Source : FFA
Evolution of technical ratios: 2010-2020
Property and casualty insurance in France:combined ratio by line of business
Excluding natural catastrophes, the motor class of business, with the exception of 2018 and 2020, has the highest combined ratios with peaks of 105.7% in 2016 and 105.4% in 2010. Due to lockdown and traffic restrictions, the motor combined ratio has dropped to 96.1% in 2020, the lowest of all classes of business.
Natural catastrophes showcase fluctuating combined ratios. In this line of business, rate amplitudes are very high from one year to the next with a peak of 201% in 2017 and a rate of 57% in 2013.
At the same time, professional and agricultural property insurance is facing a deterioration of the combined ratio. From 84%, the lowest level reported in 2011, this indicator climbs to 120.8% in 2020.
Gross combined ratio per class of business: 2010-2020
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
Motor | 105.40% | 102.70% | 101.40% | 102.30% | 104.90% | 102.50% | 105.70% | 101.60% | 99.00% | 101.60% | 96.10% |
Personal property damage | 99.00% | 93.00% | 100.00% | 99.00% | 96.00% | 90.10% | 88.30% | 91.00% | 94.70% | 94.00% | 97.30% |
Professional and agricultural property damage | 87.00% | 84.00% | 86.00% | 91.00% | 86.00% | 85.00% | 91.00% | 85.00% | 90.00% | 95.00% | 120.80% |
General third party liability (1) | 96.00% | 81.00% | 85.00% | 84.00% | 87.00% | 84.00% | 100.00% | 92.00% | 92.00% | 94.00% | ND |
Natural disasters (1) | 124.00% | 62.00% | 67.00% | 57.00% | 71.00% | 79.00% | 98.00% | 201.00% | 114.00% | 149.00% | ND |
Total (1) | 98.00% | 93.00% | 94.00% | 95.00% | 95.60% | 93.50% | 96.30% | 96.00% | 94.20% | 96.70% | ND |
