Insurance firms seem to be escaping the worst of the current economic slowdown. The Confederation of British Industry's (CBI) quarterly business confidence survey shows that some insurers and brokers are experiencing sharp rises in business volumes, even though confidence in the City has sagged to its lowest point for two years.
Accountants Pricewaterhousecoopers conducted the survey for the CBI. Partner Ian Dilks said that one of the most striking findings was the way
economic uncertainties were having a different impact on different industries within the financial services market.
“Sectors closest to the stock market, such as fund managers, show the most marked decline in optimism,” he said, “while those closest to the real economy, including general insurers, remain positive overall and expect future growth in profitability.”
Not all the findings were positive. While 26% of financial services firms reported that business was growing, this was 4% less than in the last survey.
The survey also reported that pessimism about the economy had grown since the last survey in December 2000.
Twenty two per cent of financial services firms were less optimistic about their economic prospects than three months ago. This is the lowest confidence rating for two years and compares to a positive 2% rating three months ago.
The survey predicts financial services employment levels will decline slightly over the next three months, the first fall since June 2000.