Life insurers are much less optimistic about the overall business situation than they were three months ago, according to a report by PricewaterhouseCoopers (PwC) and the Confederation of British Industry (CBI)
Business volumes in the sector continued to fall strongly over the last three months, at the fastest pace since June 2009, and the level of business remained well below normal, the research suggests.
However, life insurers expect volumes to rise slightly in the next quarter. This quarter's fall came exclusively from business with private individuals, but this is expected to grow marginally over the next three months.
Commissions or fees and premiums fell strongly. The latter are expected to fall rapidly again over the next three months.
Income from both premiums, fees and commissions and net interest, investment and trading decreased strongly over the last three months. Slight growth is expected for premium, fee and commission income over the next quarter, while net interest, investment and trading is set to fall again, albeit only slightly.
Total operating costs rose markedly in the three months to June, but average costs per transaction increased only slightly. Both total and average costs are expected to fall modestly in the next quarter, according to the report.
Overall profitability fell strongly over the three months to June, at a much faster pace than expected. However, profitability is expected to be broadly unchanged over the next quarter.
Numbers employed were broadly stable over the three months to June, despite expectations of another strong fall in headcount. Training expenditure and staff costs as a proportion of total costs increased over the past three months, the latter at the fastest pace since March 2012.
Employment is expected to fall slightly over the next three months.
Life insurers are planning to invest considerably more in IT in the year ahead, while a modest increase in investment on land and buildings is planned for the first time since
Uncertainty about demand is the main constraint on capital authorisations over the coming year, but a shortage of labour has also picked up as a limitation, rising back above its long-run average.
Firms remain strongly concerned that the level of demand could limit business expansion in the year ahead, but competition and regulation have picked up as constraints, after falling back in the March survey.
Nonetheless, firms expect to reduce spending on regulatory compliance over the year ahead, for the first time since the data series began (in December 2006).
Due to challenges obtaining medical evidence
'Work together, be prepared and where possible be flexible'
‘To focus on other priorities’
Virtual GP most popular service
At Scottish Widows recognition event