in terms of gross premium income written. Details of the leading insurers
are shown in Table 2.5.1.
By the end of the 1980s there was a clear sign of a structural shift in the
distribution system for motor insurance. The biggest intermediaries were
beginning to more actively market their product. The Automobile
Association, which had adopted a traditionally aggressive approach, was
being followed by the major banks, and most recently by leading brokers
which had been acquired by insurance companies. These latter included
Hill House Hammond, acquired by Norwich Union, and Swinton, now
owned by Sun Alliance. In addition, led by Direct Line, direct writing had
expanded dramatically. The main insurers, although initially reluctant, had
been forced to respond by offering their own direct writing alternatives
despite their fear of alienating their traditional intermediaries. Finally,
there had been a strong move to build direct business with affinity
groups.
Direct writing was estimated by the Association of British Insurers to
account for around 13 per cent of private car motor premiums in 1991.
However, this figure included business written directly by branches, direct
mail operators and affinity group business. Actual figures for the leading
direct writers are shown in Table 2.5.2 for 1991 and 1992. The leader by far
was Direct Line. This was followed by TIS, a subsidiary of Royal Insurance;
Churchill, a company created by executives who originally were part of
Direct Line and now owned by Swiss giant Winterhur and the direct sub-
118 Relationship Marketing
Table 2.5.1 Leading insurance companies in the UK private car market (1991)Average operating ratio
Company Gross earned Market No. of Claims Expenses Total
premium share vehicles (%) (%) (%)
(£m) (%)1 Norwich Union 330.1 8.3 1078 96.3 22.4 118.7
2 General Accident 306.8 7.7 1302 84.3 29.1 113.5
3 Sun Alliance 275.4 6.9 1692 84.4 30.1 114.5
4 Eagle Star 258.2 6.5 925 80.2 28.3 108.5
5 GRE 247.2 6.2 960 97.6 25.2 122.8
6 Royal Insurance 219.6 5.5 1222 85.3 28.9 114.2
7 Cooperative 156.6 3.9 660 92.2 25.0 117.2
8 AGF Insurance 142.9 3.6 717 79.4 37.7 117.0
9 Commercial Union 128.0 3.2 486 82.6 28.4 111.0
10 Cornhill 121.4 3.0 542 82.7 25.8 108.5
17 Direct Line 65.4 1.6 336 68.4 23.0 91.5Source: Gerrard Vivian Gray.