The UK financial services sector has seen growth for the third quarter in a row, according to a new report from the Confederation of British Industry / PricewaterhouseCoopers (PwC).
In the three months to March, business volumes grew across the sub-sectors, apart from banking, where volumes were stable, and finance houses, where they fell.
In the life insurance sector, costs remained level while volumes increased for the fifth
consecutive quarter, allowing average cost per transaction to “fall steeply” once again.
Values of new business and premium income advanced and the overall combination of factors lifted profits further.
General insurers reported “moderate” growth in volumes across all customer sectors and with costs stable, profitability increased “moderately”, although brokers saw a sharper rise.
The study also reveals that general insurers and brokers intends to invest more in IT systems and marketing in the year ahead, with the aim of reaching new customers and providing new services.
PwC’s UK insurance leader, Mark Stephen, comments: “The continued low growth rates and intense competition in the UK market is forcing insurers to explore new growth avenues and continue to push for new international business.”
Mr Stephen also notes that while headcount is on the up, firms are struggling to recruit the skilled managerial staff they need.
Looking ahead, he expects the UK insurance sector to change shape in the coming quarter, as the impact of this quarter’s natural disasters is felt.
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