Merrill Lynch says growth in the life assurance sector will continue to be a key driver of insurance groups. In the current low interest rate environment, with low inflation and increased wealth, assurers are anticipating at least double-digit growth in Europe in the next five years with companies placing particular emphasis on asset management growth.

At a conference organised by the brokers, CGNU stressed the need to build a global asset management presence and would consider acquisitions to do so.

Scale is also seen as important in both the life and non-life sectors. Merrill Lynch says the CGNU merger is proceeding on course and it believes the company is best placed of the British companies in the European life sector. It further notes that Irish Life & Permanent is well on course with its bancassurance business, where the margins are far higher than from other operations with continued strong economic growth in the Republic driving its success.