Only a balance of 2% of respondents claimed to be more optimistic for the future
The profitability of UK general insurers increased for the first time in a year in the three months to September 2010, according to the quarterly financial services survey conducted by the Confederation of British Industry and accounting firm PricewaterhouseCoopers.
However, the survey found that business optimism in general insurance is broadly flat, with a balance of 2% of respondents reporting greater optimism.
The market is not seeing the same improvements as the rest of the financial services industry. For example, a balance of 28% of financial services respondents saw an increase in volume, while a balance of 16% in the general insurance industry said business volumes had fallen.
The survey found that insurers are facing heavy competition, with 89% of respondents saying that competition would be likely to limit the increase of business levels.
There are positive signs, however. A balance of 17% of respondents expected business volumes to increase, while headcount also rose unexpectedly, with a balance of 40%.