Fierce competition in the commercial insurance market has helped plunge the non-motor general market into a £723 million underwriting loss in 1998.

The Association of British Insurers' Insurance Statistics Yearbook 1988-1998 reveals that many of the commercial classes of business dropped in premium value last year, which shows evidence of the soft market conditions.

Gross written premiums for trade fire dropped more than £400m over the year to £1,457m, and trade burglary dropped £74m to £247m.

The statistics reveal the non-motor market has now plunged from a £119m underwriting profit in 1997 to a £723m underwriting loss in 1998.

Losses also continued to plague the motor market which, despite significant premium rises over the year, dropped £1,472m in 1998 compared to £1,163m in 1997.

"These figures reflect the increasing competitiveness of the commercial market in the past year," said ABI spokesman Vic Rance

"The motor market continues to grab the headlines and, although losses have continued to worsen, they have been offset by the premium rises."

In effect, the UK's general insurance premiums virtually stood still last year.

Gross written premiums totalled £26,465m in 1998 which is a rise of just £69m on the 1997 figure of £26,396m.

The total amount of general UK business has actually dropped over the year to £40,940m compared to £41,286m in 1997.

Policyholders, though, are not just benefiting from the soft market conditions.

They now own almost a quarter – 23.5% – of all UK shares, according to the latest Government figures on share ownership. This is up from 18.6% in 1989. Their value has risen from £94 billion to £299 billion.

"Insurance companies increasingly help people save for retirement and stakeholder pensions will accelerate this trend," said ABI director general Mary Francis.

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