Guotou Securities: Professionalization of the UK auto insurance industry chain provides insights, PICC P&C leading company is expected to benefit in the long term.

Guotou Securities released a research report stating that the UK car insurance market is more mature in terms of rate marketization, diversified channels, depth of product innovation, and consumer-led degree. Its experience in fair pricing, open ecology, and refined operation has strong reference significance for the high-quality development of China's car insurance industry. In the long run, as the proportion of cars in Shanxi Guoxin Energy Corporation continues to increase, independent pricing of car insurance continues to be liberalized, significant acceleration of technology empowerment, and overseas business becoming increasingly mature, the comprehensive competitiveness of China's top property insurance companies is expected to continue to strengthen, market concentration is expected to steadily increase, and will help support the high-quality development of China's property insurance market. Guotou Securities' main points are as follows: The most developed car insurance market in the world, claims pressure continues to increase By 2024, the premium scale of the UK car insurance industry had reached 22.3 billion pounds, with an industry market value of approximately 21.9 billion pounds, providing protection to over 40 million cars in the UK. According to IMARC, it is expected that by the end of 2034, the size of the UK car insurance market will reach 44.3 billion US dollars, with a compound annual growth rate of 4.11%. Due to inflation and rising claims costs leading to increased theft compensation and repair costs, in 2024, car insurance companies in the UK paid out a record high of 11.7 billion pounds in claims, with theft and collision-related cases reaching a peak in Q4 2024 with an average payout of 11,200 pounds. The UK car insurance implements dual-peak regulation, encourages innovation, and strengthens consumer protection The UK car insurance regulatory model is characterized by dual-peak supervision on a mandatory basis and parallel principle-oriented regulation. On the one hand, the PRA and FCA have clear division of labor, with the PRA mainly responsible for the financial stability and risk management of insurance companies, while the FCA focuses on behavioral regulation and consumer protection, covering capital constraints and behavioral governance, ensuring that the industry maintains high standards in solvency, fair pricing, and customer protection; on the other hand, policies such as consumer responsibility, anti-"loyalty penalty," anti-discriminatory pricing, data protection, and regulatory sandbox have been steadily advancing, and the supervision of UK car insurance has evolved from traditional compliance constraints to a comprehensive governance system that balances fairness, transparency, efficiency, and competitiveness. The UK car insurance industry chain is specialized, transparent, outward-facing, and fiercely competitive The UK car insurance market has formed a highly specialized, vertically integrated, and digitally driven ecosystem. The upstream is primarily composed of reinsurance companies and data/technology providers, responsible for risk sharing and precise pricing support; the middle is led by insurance companies, taking on product development, underwriting, claims, and customer service functions; the downstream is completed by price comparison platforms, brokers and agents, car dealers, bank channels, and embedded insurance for customer outreach. Car insurance competition has gradually evolved from traditional scale competition to model competition revolving around customer segmentation, channel efficiency, data capability, and refined pricing. Trends such as price comparison websites, telematics insurance, embedded insurance, and new energy car insurance reflect the highly market-oriented, digital, and ecological characteristics of the UK market. The UK car insurance market share is relatively concentrated, and technological empowerment is making strides The top 10 car insurance companies in the UK hold about 75% of the market share, but this proportion has decreased from 86% in 2021. While the UK car insurance market still has relatively high concentration, various commercial models of car insurance companies are flourishing, with numerous innovative insurance products, segmented customer groups, fierce competition in the car insurance market, and different types of institutions engaging in differentiated competition around different customer groups and scenarios. Both the Chinese and UK car insurance industries have their own strengths, top insurance companies are expected to benefit in the long term Looking at the similarities between the Chinese and UK car insurance industries, both countries have statutory liability insurance foundations, rapid development of new energy car insurance, prominent technological empowerment, and an increasing emphasis on consumer interest protection. Looking at the differences between the Chinese and UK car insurance markets, the UK car insurance industry is more mature, more market-oriented, with a variety of business models, high market openness, and globally leading product innovation; whereas the Chinese car insurance market has higher top-tier concentration, stronger regulatory dominance, attention to social security attributes, and gradual deepening of car insurance reforms. Risk warnings: slowing macroeconomic growth, uncertainties in car insurance regulation, significant fluctuations in capital markets, etc.