Current hard market conditions are combining to enable insurers to offer lower premiums to companies with good risk management.

This was forecast by Lloyd's chairman Sax Riley who said that the return to hard market conditions meant insurers were now able to offer greater discounts than at any time since the early 1990s.

He said: "We are now seeing a return to the concept of payback for improvements to risk management practice.

"In the soft cycle of the mid-to-late 1990s, it was virtually impossible to discount premium rates that were already cut to the bone.

"Now, as high rates are encouraging insurers and their clients to work together closely, insurers have more opportunity to encourage and reward best practice risk management techniques."

Riley cited Homeowners in Texas as being rewarded for good risk management, including receiving credits of up to 35% on its household insurance for fitting approved hail resistant roofing.