Growth across the European insurance market has remained sluggish for the third successive year, according to statistics from the European Committee of Insurers.

Figures in the Paris-based organisation's annual report show general

insurance business grew by only 0.6% in 1998, compared to 3.2% in 1997 and 2.3% in 1996.

Francis Lohéac, secretary general of the body with members from 29 European countries, said the poor performance of the continent's insurance market was due to worsening underwriting conditions and increased competition.

However, some sectors of the insurance market are more buoyant than others.

Motor insurance, the most important class of general insurance accounting for 35% of the market, recorded a loss in all European countries with the exception of Cyprus, Portugal and Switzerland.

Lohéac said this was caused chiefly by rises in bodily injury costs.

The fire and theft insurance sector is also shrinking, dropping from 22% in 1992 to 20% last year, despite a general economic recovery.

But it is the marine, aviation and transport sectors that have experienced the sharpest contraction in market share, down from 6.8% in 1992 to 4.4% in 1998, under pressure from intense competition.

The growth of liability insurance has stalled after several years continuous expansion because of very keen competition.

The only significant area of growth in the general insurance market was accident and health cover which increased its share by 3% to almost 25% of non-life premium income.

The UK has the fourth biggest market for health insurance in Europe at 9.5% behind, Germany (first at 40% of turnover), France (second 14.6%), and Holland (third 10.4%).

Lohéac said claims have also risen substantially as a result of numerous natural disasters, such as floods, last year.

Another trend highlighted by Lohéac is the record number of mergers between European insurers – there were an average of four each month in 1998, a total of 45 last year.

However, the total number of staff working in insurance has remained stable at slightly more than one million.

The UK continues to have the largest share of the European insurance market in terms of premium income at almost 24%, then Germany with 20.5% and France which has slipped to third at 17.1%. But Italy has seen its market share increase the most to 8.4% last year from 6.8% in 1992.