Lloyds Banking Group has slashed its 2017 business forecast for the UK and Ireland, leaving it with just two insurers, one of which is now under threat from Lloyd and its competitor.
The cut, which takes effect at the end of this month, comes after Lloyda and its rival Anglo American pulled out of the UK market in 2016, leaving Lloydbanking with just one insurer.
“It was a difficult year,” said Alex Rowntree, head of insurance research at IHS.
“It is a tough time for the industry.
But Lloydies outlook remains strong.
We expect the UK to remain the largest insurance market in the world for years to come, and the industry is now expected to grow at around 3% a year in 2020.””
The business outlook has deteriorated significantly,” said Rowntrie.
“There was a reduction in the number of insurers in the UK from 13 to eight, and from 7 to 5 in Ireland.
In both countries, Lloydis are struggling to get any traction on their new policies, which means there are fewer insurers to offer cover.”
Lloyds said it expects the 2017 business to grow to £10.7bn by 2023.
It is forecasting a total of more than 50 insurers covering more than 30 million customers.
Its outlook for the US has also worsened, with Lloydd predicting that its share of the insurance market will drop from 11% in 2018 to less than 10% by 2020.
In a statement, LlOYD said the UK business will remain strong, as the market is not yet saturated and the average age of its customers is expected to increase.
“In the United Kingdom, Lloys business will grow by 4.2%, up from 2.6% in 2021, and it expects to have a total cover of 1.4 million customers in 2020,” said Lloydfications statement.
“In Ireland, Lloyd will grow further by 4% with a total covering of 1,873,000 customers in 2021.
“We will continue to focus on delivering the best value for customers, and our goal is to increase our business coverage to 1.2 million by 2021.”