Life insurance respondents noted strong growth in business volumes and income values, lifting profitability, according to the latest CBI/PwC Financial Services Survey, launched today. General insurers also saw solid business volumes growth and volumes are expected to grow at an even stronger pace over the next quarter. Insurance brokers in contrast, recorded business volumes falls, disappointing expectations of continued growth within the industry.
Jonathan Howe, UK Insurance Leader at PwC, said: “Life insurers report a huge upswing in sentiment. Buoyed by strong performance in the run up to retail distribution review (RDR) implementation, overall survey results represents the sector’s most confident response in more than three years.
“Life insurers’ mood has apparently been boosted by a strong quarter for business, not to mention a marked and very welcome reported increase in profitability. The sense of optimism may also reflect more intangible factors, such as relief at the delay of Solvency II.
“General insurers are feeling slightly more confident, and are hoping for stronger rates through the commercial renewal season. Even so, weak investment returns remain a major and constant challenge to the industry.
“Even though M&A remains the subject of considerable debate within the industry, those surveyed do not expect to see a pick-up in deal activity during 2013. A growing interest in strategic partnerships is predicted as profitability continues to be a key pressure for general insurers.”