Business volumes grew between March and May 2015, while overall profitability of business rose sharply for life insurers, a Confederation of British Industry(CBI)/PwC survey has found.
Operating costs rose for insurance brokers with investments in technology and staffing and were expected to continue to do so in the coming months.
Over half (55%) of life insurers intend to increase their spending on regulatory compliance over the coming three months, while 39% said their spending would fall.
Life insurers reported suffering a slump in productivity since the financial crisis, as have banks.
Insurers believed that the government should prioritise promoting financial literacy among households and businesses.
The findings were reported in the CBI/PwC Financial Services survey.
Jonathan Howe, UK insurance leader at PwC, said: "The growth of business volumes for life insurers may be explained by the widespread decision by customers to delay any transactions until the new pensions reforms came into force in April.
He added: "The sentiment within the life insurance sector that productivity per employee has dropped since the financial crisis could, to some extent, reflect the reallocation of resources within companies to concentrate on non-productive activities such as regulatory compliance.
"A predicted slowdown in the increase of regulatory expenditure by life insurers may suggest that many life insurers are well in to their Solvency II journey.
"On the other hand, the intention within general insurance to significantly increase investment in compliance may suggest that general insurers are slightly behind their life counterparts.
"The recent pension reforms - and the scale of retirement options newly available to consumers - will have brought the issue of financial literacy to the forefront for life insurers.
"The life insurance industry, along with the Government, has an important role to play in helping consumers to make informed and appropriate decisions about their financial future.
"New digital platforms and distribution channels will continue to be vital tools to enable insurers to engage with new customers."
Further Reading:
Protection market grows by 4.1% - Swiss Re
