GIM1220 - The UK insurance market: the domestic market

The UK market for general insurance can be split into two areas, the domestic insurance market and the London market.

The domestic market is a direct insurance market split between a mass market, dealing for example with the needs of individual house-holders and motorists, and a specialist market catering for the complex needs of the business community and offering cover for all manner of commercial and financial risks.

Companies may operate through brokers or agents, through a direct sales force, or direct with the policyholder through the mail, telephone or Internet. A private policyholder, then, may obtain cover in a variety of ways, directly from insurance companies operating through a network of branches or agents, or indirectly through a broker from either a corporate insurer or a Lloyd's syndicate. Lloyd's business must be placed through authorised Lloyd's brokers. Prospective policyholders cannot approach a Lloyd’s syndicate directly.

Small commercial risks may be handled in much the same way as private risks. A large commercial concern with complicated needs is likely to have its own insurance department and/or risk manager who will assess the concern's insurance needs, including the extent to which risk should be retained.

Apart from compulsory motor insurance, UK residents are free to obtain insurance from insurers outside the UK, and since 1 July 1994 there has been a single market in insurance throughout the EEA with no national boundaries.