UK Employers Liability Insurance: Market Dynamics and Opportunities 2016 has recently announced the addition of a market study “ UK Employers Liability Insurance: Market Dynamics and Opportunities 2016, is a comparative analysis of the global market.


The UK employers liability insurance market continues to be characterized by overcapacity and unprofitability. While underlying demand for employers liability has steadily increased in recent years, premium rates continue to lag behind claims inflation. In the wake of the uncertainties created by the Brexit vote and the governments personal injury reforms, the market could be in for a turbulent few years.

Key Findings

UK employers liability market gross written premium grew by 1% in 2015, hampered by tough underwriting conditions in a competitive market. Premium rates are currently reported to be largely flat to slightly negative across the UK as a whole.

Employers liability remains unprofitable; the sector has not made an underwriting profit since 2005. The market continues to be propped up by reserve releases, which are showing no signs of slowing down.

The level of claims inflation has reduced due to the success of LASPO and fixed recoverable costs. However, this is likely to be temporary, and inflation for catastrophic losses remains above 10%.

The number of accident and disease employers liability claims recorded fell significantly in 201516 (-16.3%) due to a reduction in the impact of the LASPO spike, the start of a decline in noise-induced hearing loss (NIHL) claims, and continued improvements in workplace health and safety.

However, disease claims settled are yet to show any signs of falling (+29.1% in 201516), reflecting the greater length of time it takes to settle disease claims and the time lag before insurers will feel the impact of any reduction in NIHL claims recorded.


Verdict Financials UK Employers Liability Insurance 2016: Market Dynamics and Opportunities tracks the health and the shape of the market, taking into account market size, profitability and performance ratios, and the claims environment. Bringing this to life, the context of the UKs economic growth, business landscape, and the impact of a post-Brexit environment are all taken into consideration to build a full picture of this space. Key announcements, shifts in the market, and likely future changes are analyzed for impact across all relevant stakeholders.

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Table of Contents


EL market conditions remain tough and the sector faces a turbulent few years

Key findings

Critical success factors


Underlying demand for EL continued to rise, particularly in service industries

The number of businesses and employees continued to grow in 2015

SMEs account for over 52% of private sector employees

Increasing demand is occurring at the small and large ends of the company size spectrum

The UK economy has continued to shift from manufacturing to services

High levels of competition continue to dampen growth in the EL market

The UK EL market grew slightly in 2015

Premium rates are flat or slightly negative

The underlying macroeconomic environment remained positive but uneven

The top 10 EL insurers increased their market share in 2015

Lloyd’s is gaining market share as it increases binder and line slip business

EL remains unprofitable and continues to be propped up by reserve releases

EL has not made an underwriting profit since 2005

EL loss ratios continue to be plagued by claims inflation that outpaces premium rate rises

The number of EL claims recorded is falling

Claims numbers have fallen in both sectors of EL

NIHL continues to take its toll

NIHL drove a spike in disease claims, which peaked in 2013-14

NIHL claims started to wane in 2015-16

Claims settled are still sharply rising, and recorded claims remain significantly above pre-LASPO levels

The number of asbestosis and mesothelioma cases are largely stable

Accident claims numbers have fallen below pre-LASPO levels

Accident claims have dropped significantly since 2011-12

Injuries to employees, the underlying driver of EL accident claims, are in long-term decline

The Claims Portal is having limited success, particularly for disease claims, leading to calls for reform

Only 20% of disease claims are estimated to meet portal criteria

4% of disease claims and 12% of accident claims notified have been settled within the portal


EL GWP is forecast to remain largely flat until 2018

There is little evidence of any near-term shift in premium rates

A significant capacity or investment shock would be required to shift rates

EL GWP is expected to decline slightly in 2017

Underwriting profitability will remain challenging

The negative economic consequences of Brexit will have an adverse effect on EL

The EL product, levels of competition, and health and safety legislation are likely to be unaffected by Brexit

The economic consequences of Brexit will have the greatest impact

The Mesothelioma (Amendment) Bill could place a further levy on EL insurers

Psychological and chronic back pain claims have yet to have any real impact

Government personal injury reforms could have a seismic impact on EL

Government proposals would increase the small claims track limit and remove general damages for minor soft tissue injuries

There is extreme uncertainty over the future passage and scope of the reforms

Impacts of the reforms: wide-ranging with potential for unintended consequences

The increase in the small claims track limit could affect up to 20% of EL claims

Wherever reform lines are drawn, repercussions will be felt in EL

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