Medical claims inflation has cancelled out much of the premium income gain made by BCWA Healthcare last year.

Premium income for the Bristol-based health insurer grew by 8% to £45.8m last year, but this was almost matched by the rate of claims incurred, which climbed by 6% to £39.6m.

Profits for the year ending December 31, 1999, jumped to £631,000 compared to just £83,000 in 1998.

BCWA has also tapped into new markets in the high net worth Channel Islands.

Peter James, BCWA chairman, said the group had made strong financial progress despite persistently high claims inflation and intensive competition.

He indicated premium increases for the coming year will be kept low.