Insurers face "perfect storm" over profits

Tax burden falling

The study, published by the Ernst & Young ITEM Club, forecast that low interest rates, higher hedging costs, lower business volumes and the impact of Solvency II will hit insurers.

The report predicted insurer's profits will consequently fall for the second year in a row.

Carl Astorri, senior economic adviser for the ITEM club, said 2012 is already proving to be a "tough year" for the insurance industry.

He explained: "Insurers need to plan their businesses on the assumption that the low

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