CONSOLIDATION through mergers and takeovers is expected to continue in the general insurance market, where about 24 companies compete for premium income of about £1.2 [billion.
The Royal & Sun Alliance move is the latest in a series of rationalisations in the insurance sector. It closely follows the £30 million takeover of New Ireland subsidiary Irish National by Eagle Star in February to create the fifth largest company in the general insurance market.
Within the past year the Touchline direct operation was taken over by Eureko which owns the life assurers Friends Provident and general insurer Celtic.
The top five companies now have almost 70 per cent of the market. There are a number of small companies with market shares of less than 5 per cent. These are seen as at risk or as possible takeover targets in a highly competitive and difficult market.
Building scale is seen as important, in order to get economies and returns from investment in information technology and to deliver cost effective products and services. But achieving growth organically is very difficult because of intense price competition.
