The five largest car insurance companies in the UK

The UK has one of the most vibrant insurance industries in the world and currently there are more than 600 companies offering general insurance alone. General insurance is the sector under which car insurance is filed, along with home, commercial and travel insurance.

Despite the fact that there are so many companies offering types of general insurance, there are only around 50 that provide car insurance. This is still an excellent selection of motor insurance firms, which encourages healthy competition and gives UK consumers a good choice of insurers to pick from.

However, what may come as a surprise to some people is that just five companies make up the majority of the car insurance market. These five firms make up 57% of the revenue generated by car insurance.

The top five are as follows:

1. Norwich Union

2. Zurich Financial Services

3. Royal & SunAlliance

4. Allianz Cornhill

5. NFU Mutual

Norwich Union

Norwich Union is only known as such in the UK. To the rest of the world, it is Aviva, the fifth largest insurance company globally. Considering this position, it is not surprising that Norwich Union is a market leader in the UK's car insurance industry.

The reason why Norwich Union is also called Aviva involves a short trip into the history of the company. In 1998, two large insurance companies, Commercial Union and General Accident, merged to form CGU.

CGU then merged with Norwich Union in 2000, creating CGNU. However, unwilling to lose the trusted Norwich Union brand name, the company kept its name when CGNU was re-named Aviva (Hebrew for spring) in 2002.

Norwich Union is notable in the UK car insurance industry not only for being the largest firm but also for being the first company to adopt pay-as-you-drive motor insurance. This involves a black box being installed in each customer's car so that their every movement can be monitored and they can be charged by the mile accordingly.

Although this method of calculating a car insurance quote would result in cut-price premiums for many, the UK public have yet to be convinced. The black boxes have been described as being 'Big Brother devices' and a survey in 2006 found that one in four motorists would not consider having one installed in their car on this basis. Read more about Norwich Union.

Zurich Financial Services

As the car insurance company with the second highest revenue in the UK, Zurich Financial Services is very well known.

However, it is not just the UK that is familiar with the Zurich name. The firm started out in Switzerland, taking its name from what is now the largest city in the country. Its success has seen its influence spread across the world and it now enjoys recognition in over 120 countries.

The Zurich Financial Services Group was formed in 1998, following a merge with B.A.T Industries Plc. Before this, the business had been known simply as Zurich since its inception in 1872.

Following a period of loss and subsequent restructuring, the Group has seen good profits each year since, with an annual income of around USD 2,500 million and profit of USD 3,100 million.

Recent research that has been carried out into the car insurance industry has found Zurich's policies to be amongst the finest on the market. Respected business analysts Defaqto gave the Zurich Car Solutions policy five stars, the best possible rating.

Royal & SunAlliance

The third greatest revenue in the UK car insurance industry belongs to Royal & SunAlliance (R&SA), which is based in London.

R&SA is a very powerful firm with operations in over 100 countries and in the 1990s was given the privilege of being the first foreign company allowed to sell insurance in China.

Much of R&SA's UK car insurance business comes through its More Than brand, which is extremely well known in the UK. Like Norwich Union and its pay-as-you-drive policies, it has gained publicity through a unique kind of policy: Drivetime.

The Drivetime car insurance policy is aimed at young drivers and is much cheaper than many other motor insurance quotes on the market - provided that the car is not driven late at night. It is based on the statistics that young drivers are most likely to have a serious accident when driving between 11pm and 6am.

However, should the young driver want to venture out in the early hours, they will have to pay a charge of £25. If they do this regularly, the car insurance policy becomes less financially attractive. Read more about the role of the insurance industry in improving road safety.

Allianz Cornhill

Allianz Cornhill is a UK-based general insurer that provides cover for everything from cars to musical instruments. It is the fourth largest motor insurance company in the UK and was awarded the esteemed General Insurer of the Year award in both 2004 and 2005.

Cornhill Insurance was formed in 1905 and has been issuing motor insurance policies to customers since 1924. After enjoying notable success for many years Cornhill the company was sold to Allianz AG in 1986, although it was not until relatively recently that the Allianz Cornhill Insurance Plc name was adopted.

In 1994, Cornhill Direct was launched as a direct provider of car insurance, home insurance and travel insurance. It provides both online and over the phone quotes for packages designed for safer drivers with no claims bonuses.

2006 proved to be one of the most profitable years yet for Allianz Cornhill, with £397.5m in gross written premium recorded by the end of the third quarter.

NFU Mutual

NFU Mutual is probably the most unusual entry in the top five - or possibly the top ten - general insurance companies in the UK.

Officially called "The National Farmers Union Mutual Insurance Society Ltd" but better known as NFU Mutual, it has been providing insurance since 1910. It was set up by seven farmers in order to offer low cost cover to members of the newly-founded National Farmers Union but slowly diversified and expanded to other parts of the insurance market.

NFU Mutual does not offer online car insurance, as most other insurance firms do. Instead, it has 300 sales offices across the UK and markets itself as a local, face to face service. However, it does also have one call centre.

Its different customer service technique has paid off and in 2002, NFU Mutual received the Customer Care Award in the British Insurance Awards. The following year, it won the General Insurer of the Year category.

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