In the past three years, foreign insurers have managed to increase their premium volume to more than 10% of the Dutch non-life market, according to a study conducted by IG&H. More and more foreign risk bearers enter the Dutch insurance market without reporting to DNB, helped by a mismatch between customer demand and offer, rising premiums, harmonizing legislation, and consultants who professionalize.
The newspapers are full of press releases about foreign risk bearers that enter the Dutch market, but exact figures on their size are difficult to find because new entrants don’t report to DNB. Now, it’s possible through a combination of interviews as well as public and IG&H data.
Whereas Dutch risk bearers have grown by barely 3% a year in recent years, foreign risk bearers have managed to record an annual growth of more than 10% up to approximately €1.6 billion GWP in 2018. This means they now hold more than 10% of the Dutch non-life market (note: this 10% concerns foreign risk bearers that have never reported in the Netherlands and therefore don’t include Allianz and Amlin, for example). The premium volume is still highly concentrated – approximately 80% of this premium volume is still provided by risk bearers that have been active in the Netherlands for a long time (e.g. Chubb, AIG, and Lloyd’s). However, this division is expected to become less concentrated in the coming years.
New players such as Starstone, China Taiping, and CNA Hardy expand the number of mandated brokers step by step, focusing primarily on corporate non-life insurances at the larger, professional consulting firms and service providers. In doing so, they indicate their specific desire to grow as well as their assiduous search for larger limits. Furthermore, interviews point out that risk bearers organize themselves with the long term in mind – by implementing Dutch management with market experience, among other things.
Impact on the Dutch insurance landscape
This expansion of foreign risk bearers has a major impact on the Dutch insurance landscape. Traditional full-service insurers are coming under further pressure. Whereas in the past, successful and profitable activities could be realized in the Dutch non-life market through one of the three value chain roles (full-service insurer, mandated broker, consultant), the mere role of underwriter has been successfully established now, too.
This means insurers are now being attacked in a part of the value chain where they used to operate relatively unopposed. On top of that, foreign parties can reap the benefits of international diversification and a position that’s often stronger in financial terms, which means they hold strong cards for this position.
This doesn’t directly sideline traditional full-service insurers. In the search for distinction, though, many Dutch insurers will be forced to delve deeper into specific target groups and risks. While doing so, it’s important that they truly provide added value through an in-depth understanding of local customer needs, through (data-driven) expertise, and by expanding the offer with related services. Instead of mere insurances, they should offer complete solutions, which provide a distinctiveness that is difficult to match for foreign competitors. For foreign risk bearers, the Dutch market represents a relatively small share in the total portfolio, and they often lack specific (target group-related) knowledge about the Netherlands.
Written by: Jan Pieter van der Helm (director insurance), Jeroen Enthoven (consultant insurance) and Remon Balster (consultant insurance)
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