Years of contraction in the UK broker market are set to come to an end, industry research firm Ibisworld has forecast.

In its latest report on the sector, Ibisworld says revenue in the UK broking sector has fallen at an estimated compound annual rate of 4.3% over the last five years.

But it is predicting a recovery in the market in 2012/13, with total UK broking revenue forecast to increase 5.7% to £33.4 billion ($52 billion).

The report says demand for insurance in the UK is currently in “recovery stage” and that the next five years “will see demand for both life, and property and casualty lines grow, as consumers build assets and free up more disposable income”.

Despite the recent declines in the UK economy, Ibisworld says the country’s insurance sector is “very strong”.

The UK insurance market is the third-largest in the world, behind the US and Japan, having increased from 7% of the world market to 10% over the past decade, while Japan’s world insurance market share has fallen from 25% to 11% over the same period.