The British property insurance market is a sizable one, and is the second-largest sector in general insurance, after motor, with a reported premium of £12.1 billion in 2008. In the last five years, claims and expenses for the sector have risen by 22%, while premium (commercial, household and domestic) has only grown by 15%. Extrapolate these growth trends, and it’s clear that the sector will face serious profitability challenges in the coming years.

In addition, these are not benign times for property insurers—increased flooding, aggregators and fraud all pose challenges. Insurers remain constrained by a financially challenged government with overwhelming budget pressures with regard to flood protection. If the motor market is anything to go by, it will be very difficult to stop the erosion of premium by the aggregators. Continued investment in fraud detection processes and technology will help keep the fraud contained.

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