Price cuts could be counterproductive, according to CII conference delegates.

Leading insurers warned that fierce price competition could harm service levels, causing customers to seek insurance solutions outside the mainstream market.

Groupama chairman and chief executive Pierre Lefèvre, AA Insurance Services managing director Andy Briscoe, IUA chairman Stephen Cane, AEGON corporate development director Laurie Edmans and Halifax General Insurance Services managing director Howard Posner all said the industry was concentrating too much on price.

"I wish we could find a way of getting customers to focus on other things than price," Briscoe said. "We have cut costs so much we do not deliver the service people expect."

Posner agreed: "We need a fundamental rethink in how we deal with our customers."

But agreement broke down on the way forward for the industry. The panel was split on professional qualifications for call centre staff, and panellists seemed reluctant to practise what they were preaching on price cuts.

When the major insurers were asked if they would stop demanding improved service for reduced costs from their business partners, both Lefèvre and Posner had one answer: "No."