Almost one-third of insurance brokers are teetering on the edge of unprofitability.

This is the alarming conclusion of the latest survey of the sector by analysts Plimsoll Portfolio.

The report's authors said they were alarmed to discover that: ''29% of the industry has suffered a serious decline in their sales performance relative to their assets".

They go on to warn slightly more brokers (31% of the total) are unable to generate sufficient profits to break even.

Don Turkington, managing director of Plimsoll says this hardcore of firms have some "tough and immediate decisions" to take if they are to halt their slide into decline.

The lagging third of firms managed to generate only 24p worth of sales for every £1 invested compared to the industry average of 73p.

However this industry-wide sales figure is an improvement on the 71p revealed by a similar Plimsoll survey four years previously.

To match the performance of the industry as a whole, it was revealed the under-achievers will need to increase their sales by more than 180%.

Further bad news is contained in the report with the revelation that broker profits have stood still for the past four years. Their return on investment has remained at a modest four pence per £1 invested.

In comparison, the employment agencies sector generates £3.28 of sales for every £1 invested and 14p of profit. A level of performance matched by only five insurance brokers, the survey found.

But there is some good news contained in the report. Plimsoll analysts said more than 60 % of struggling brokers have taken steps to reduce their assets to reflect their reduction in capacity. Although it is at pains to stress many brokers had not cut sufficiently deep.

The Plimsoll survey was based on more than 1,000 firms over four years. The report priced £305 is available from Plimsoll Portfolio Analysts.