A Financial Services Survey conducted by the CBI in partnership with PwC has found activity in the UK financial services sector to be broadly stable in the first 3 months of 2010, better than many had expected.
According to the report life insurance companies have seen business volumes rise at the joint fastest pace on record which has provided the first growth since September 2007. This has led to the first rise in profitability since December 2007, with steady growth set to continue in the three months ahead.
The report also provided some insight into the expansion life insurers are making increasingly looking into new products and markets further afield to generate growth. Tha same picture cannot be painted for general insurers who experience a sharp decline in business, volumes and profitability in the three months to March.
The report showed there were significant declines in volumes of business with private individuals and commercial customers, however employment levels among general insurers rose slightly despite the downturn in business.
Looking at insurance brokers as a group saw their profitability rise for the fifth consecutive quarter although at a slower rate than expected. Whilst seeing increased volumes of business the speed at which employment increased was even faster and is set to increase in the following three months.
PwC’s UK insurance leader stated “Life insurers experienced a an uptick in business activity and premium income at the beginning of this … however, it remains to be seen whether this recovery will be sustained and the sector is not throwing caution to the wind yet.”