Almost eight in ten (79%) brokers said cross sales would be a growth area in the first quarter of the year, as did 47% of life companies, according to the Confederation of British Industry’s (CBI’s) latest quarterly survey of the financial services industry.
Howard Scott, an insurance partner at PwC, which compiled the paper, blamed a poor end to 2011, with bad results expected to continue into 2012.
“Life insurers’ predictions for the New Year are downbeat as they struggle to contend with the unhelpful combination of falling consumer confidence, a quiet housing market, tighter household budgets and volatile investment markets,” he said.
“This difficult environment is expected to hurt profitability, with most life insurers expecting a significant dip in the next quarter.”
Regulation remained a “major preoccupation” for firms, with companies increasing spending in their sales channels in preparation for RDR, he added.
The findings follow a handful of cases where insurers have been accused of attempting to poach advisers’ clients.
In November, Aviva was forced to apologise after offering discounted Private Medical Insurance (PMI) to IFA clients, in what the insurer admitted was a “mistake”.
Insurance was also one of the worst-performing sectors in financial services during Q4 of 2011, according to the CBI.
Of the 106 companies polled across the industry, 53% saw volumes rise in the quarter to December, and 24% reported a fall. The resulting balance of +29% is the highest since June 2007. In the broking sector, however, the balance was -50%.
