NU Online News Service, March 30, 4:04 p.m.EST

Property-casualty insurers in the United Kingdom are moreoptimistic about rates increasing and the future of theiroperations than three months ago and plan to hire additionalworkers, according to a consulting firm study.

PricewaterhouseCoopers' said it found U.K. p-c insurers "feelmore optimistic than they did in December, and are more confidentthan at any point since 2005."

Insurers, the firm said, are "positively euphoric in comparisonto other areas of financial services."

The poor investment returns in 2008 are pushing insurers toincrease premium rates and the "anticipated improvement inunderwriting profitability underpins the sector's newly positiveoutlook," said PwC.

The positive outlook was evident in the last survey in 2008, thefirm said, and appears to be continuing into this year. More than60 percent of 90 firms surveyed expect premium rates to continuetheir upward trend over the next three months, it found.

PwC said demand for p-c insurance is not greatly affected by thecurrent downturn and "business is expected to continue growingacross personal and commercial lines."

Claims remain manageable, the report said, "although thenegative effects of the economic downturn may take several quartersto emerge fully." However, improvements in pricing "have putprofitability on an upward trend."

Insurers are controlling their operating costs and are makingplans to recruit more people into the business, PwC found.

P-c insurance Brokers were described as being slightly lessoptimistic than they were three months ago, the survey found, butbusiness growth was strong surpassing expectations. Employmentnumbers fell in the sector as a much higher rate than expected. Thesame rate of decline is expected in the next quarter.

On the life insurance side, carriers were found to bepessimistic, expecting "low levels of new business and overallprofitability."

"Life companies are focusing all their effort on reassuring andretaining their existing customers," said the report.

The survey of the overall United Kingdom financial sector foundoverall sentiment "is still deteriorating, but not as quickly as atthe end of last year."

Despite the continued economic downturn, executives may bebecoming more optimistic because expectations have adjusted to thecrisis and there is some expectation that the economic decline maybegin to slow, said PwC.

The survey was paid for by CBI, a business associationrepresenting 240,000 firms in the United Kingdom. The survey wasconducted between Feb. 18 and March 4 of this year.