More than a quarter of UK general insurers are optimistic about the future, but only 3% have reported business volume growth since the March quarter, a survey shows.

Respondents were confident about profitability last quarter, with 51% reporting profit growth in the period, according to the latest Confederation of British Industry and PricewaterhouseCoopers report.

“General insurers report a solid and welcome improvement in confidence,” it says. “Revenue growth remains hard to achieve, but profitability has received a boost from cost reductions and lower claims.”

Respondents report an improvement in corporate business. Although retail business is flat, the industry hopes for growth as the economy improves, according to the study.

Premium income is “failing to meet expectations” because prices are down, but general insurers are benefitting from a drop in the value of claims.

“Expectations of a further decline during the [northern] summer suggest the industry’s investment in claims management may finally be paying off,” the report says.

“The improvement in profitability was also supported by reductions in headcount and total operating costs.

“It is encouraging to see the industry focusing on efficiency, but this is a reminder of the role that cost management plays in many insurers’ ability to deliver earnings growth.”