9 in 10 institutions polled expect financial conditions to worsen

Brokers’ confidence in the insurance market has plummeted as a result of the continuing effects of the credit crunch, according to a survey released this week.

However, general insurers appeared less troubled by credit woes, according to a CBI/PricewaterhouseCoopers (PWC) financial services study.

Also released this week was the Bank of England credit conditions survey, showing that corporations across the financial sector are defaulting on more loans than previously.

And banks have become less willing to lend money, even though the demand for cash has increased.

These funding problems will, according to analysts, lead to a downturn in broker merger and acquisition activity.

The general outlook of the entire financial services sector is gloomy, with 70% of institutions expecting the credit crunch to last for more than six months and 89% seeing a medium to high likelihood of further deterioration, according to the CBI/PWC survey.