A new survey from the Confederation of British Industry and PriceCoopersWaterhorse will make sober reading for UK broking firms. General insurance brokers will hear themselves saying that they expect business volumes to drop over the next three months.
April to June was “quiet” according to the survey, with only marginal growth and with transaction costs on the rise. A majority of brokers said they anticipated a negative trend on fees and commissions over the coming quarter. “Terrible weather we’ve been having,” one broker added, gloomily.
The news for insurers was better – despite claims costs continuing to mount at unprecedented rates. “General insurers’ confidence has been boosted this quarter by strong growth in business volumes and the biggest increase in premium income since 2007,” noted PriceCooperWaterCoopers insurance partner Armoghan Mohammed.
“Further premium improvements are predicted,” he predicted, “as the recent hardening of motor rates and the knock-on effects of the Japanese tsunami and US spring storms start to materialise.
“However, profits are still suffering due to higher operating costs and inflated claims levels forcing insurers to continue to recognise the need to focus on underwriting and pricing.”
Thank God for waves and windstorms!