The Insights from Insurance Times’ Top 50 Insurers Report: A Deep Dive into the UK and Gibraltar Market

Insurance Times has released its much-anticipated Top 50 Insurers report, showcasing the largest non-life insurers operating in the UK and Gibraltar, collectively overseeing over £81 billion in gross written premiums (GWP). As the industry evolves, a pressing question arises: does size equate to better underwriting profits?

Understanding Size vs. Profitability in Insurance

Market intelligence firm Insurance DataLab examined the latest underwriting results of non-Lloyd’s insurers presented in this year’s report. The analysis is grounded in the latest Solvency and Financial Condition Report (SFCR) data, revealing that the 2025 cohort of the UK’s largest general insurers has achieved an aggregate combined operating ratio (COR) of 96.1% for 2024/25. This performance marks a return to underwriting profitability, buoyed by a 5.4 percentage point improvement in expense ratios, after last year’s underwriting loss with a COR of 101.6%.

Performance Comparison: Top vs. Non-Top Insurers

Interestingly, insurers outside of the Top 50 demonstrated even greater strength, reporting a COR of 95.2% for the same period, outperforming their larger counterparts by 0.9 percentage points. This turnaround is particularly noteworthy, given that these insurers had reported a significant loss of 105.8% in the previous year—marking their first underwriting profit in three years.

The advantageous shift for smaller insurers is attributed to improvements in both loss and expense ratios. They successfully reduced their aggregate loss ratio by 7.8 percentage points, while their expense ratio showed a 2.8 percentage point improvement.

The Success Formula for Specialists

Many smaller insurers excel due to their specialized business lines, which enable them to outperform larger firms in niche markets. While larger insurers often serve mainstream markets that prioritize volume, this can lead to thinner profit margins. The performance difference is stark in loss ratios, with insurers outside the Top 50 reporting a loss ratio of 60.3%, around five percentage points better than their larger peers—fueling their improved underwriting performance.

However, specializing comes with challenges. Smaller insurers face volatility due to a lack of diversification. The volatility in COR performance shows that Top 50 Insurers exhibit a 2.5 percentage point variability over four years, while those outside the ranking are nearly twice as volatile at 4.9 percentage points. Moreover, smaller insurers struggle with higher expense ratios, with an average of 34.8% compared to 30.7% for their larger competitors.

The Role of Economies of Scale

Among the Top 50 Insurers, economies of scale play a pivotal role in performance. The ten largest insurers report an impressive expense ratio just above 30%. This consistent outperformance stems from increased premium bases and centralized operational structures that smaller firms can’t match. Notably, insurers ranked 41 to 50 defied recent trends with an aggregate expense ratio of 26%, thanks to several large reinsurance deals affecting expense metrics.

Despite these impressive expense ratios, larger insurers report a 67.8% aggregate loss ratio, significantly above mid-ranking insurers’ 50.5% loss ratio. Yet, the low expense base allows the largest insurers to maintain a profitable COR of 98%. This is slightly better than the average for the entire Top 50 Insurers report.

Detailed Breakdown of Performance Rankings

• Top 10 Insurers: COR of 98%, highlighted by a minimal expense ratio.
• Ranked 11 to 20: COR of 90.8%, driven by improved loss ratios.
• Ranked 21 to 30: COR of 94.7%.
• Ranked 31 to 40: The highest performance, buoyed by an effective loss ratio despite a relatively high expense ratio of 38.3%.

Strategies for Sustained Leadership

The performance disparity illuminates that while size brings certain advantages, it’s not the sole route to success in the UK general insurance (UKGI) market. Underwriting discipline and portfolio focus are equally essential for differentiating performance.

Mid-ranking insurers must prioritize sharper pricing and tighter claims management to sustain profitability. Smaller players, meanwhile, need to balance the advantages of specialization against the volatility risks they face.

Looking Ahead: The Role of Technology in Insurance

As the landscape shifts, technology will emerge as a crucial factor for managing expenses and risk selection. Innovations such as generative artificial intelligence will contribute to improved expense ratios and optimized risk selection. However, challenges like heightened regulatory scrutiny, ongoing claims inflation, and intensifying competition remain significant.

The jury is out on whether insurers can maintain these advantages and translate them into sustainable underwriting profits. Ultimately, those who successfully balance efficiency, specialization, and flexibility in this complex environment are poised to emerge as leaders in the insurance market.

The insights from the Top 50 Insurers report underscore the evolving dynamics in the UK and Gibraltar insurance market. As firms navigate challenges and opportunities, understanding the intricate balance between size, specialization, and technological integration will shape the future of profitable underwriting in this sector.