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12 July 2019 Insurance

Companies House data reveals 21st century insurance firms outnumber incumbents two to one

Two in five insurance businesses in the life and non-life insurance sectors have emerged in less than a decade, since 2010, according to a study of Companies House data by digital home insurer Policy Expert.

An additional 28 percent were founded between 2000 and 2009, meaning that in total, 68 percent of UK insurance firms active today were created in the 21st century. In contrast, just 19 percent of active firms were established in the 1990s, with the remaining 13 percent formed in 1989 or earlier.

The insurer said that in 2018, 504 new insurance businesses registered with Companies House, which is an average of more than one a day.

In the first four months to 2019, there were 216 registrations as insurtech investment helped to accelerate the trend.

The research also showed that the ‘average age’ of insurance firms was 16 years old, meaning that many of them “predate the rise of social media platforms and technologies that have impacted consumer behaviour and business operations”, such as Amazon Web Services, Facebook, Twitter, WhatsApp and Instagram.

At the other end of the spectrum, the sector has nearly 60 ‘centurion’ businesses who have been active for 100 years or more.

London is leading the way for new entrants to insurance with 30 percent of 21st century firms as well as 45 percent of those set up before 2000.

Grantham, Leeds, Manchester, Bristol and Birmingham make up the next five insurance start-up hotspots accounting for a combined 6 percent of 21st century businesses.

Across the UK, 60 percent of the businesses that emerged in the 21st century have been focused on general or commercial insurance activities. This is twice as many as the firms focused on the life sector (27 percent). The remaining 14 percent insure both life and non-life risks.

Adam Powell, co-founder and chief operating officer at Policy Expert, said: “These findings show that exponential growth is making the UK insurance space more vibrant and competitive by the day driven forwards by entrepreneurial ideas and tech-led innovation.

“The rapid rate of business creation means a horde of start-ups are rubbing shoulders with firms that are generations apart in terms of experience. Many firms both old and new are still chasing the holy grail of combining innovation and scale. In today’s competitive climate, it’s not enough for new propositions to stand out from the crowd, unless you can convert the crowd into loyal customers by offering something above and beyond the insurance status quo.

“Our journey from selling our first policy in 2011 to disrupting the top 20 UK home insurers has been built on transparent policies, fair pricing and attentive customer service, backed by agile technology and data analytics. This formula has driven Policy Expert to bridge the gap between start-ups and incumbents, with over 2.3m policies sold and 550,000 live customers to rank among UK insurtech’s biggest successes to date.”

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