UK insurers managed to shrug off the worst of the recession because of continued demand from outside the UK for their products, the Association of British Insurers (ABI) says.
Despite a fall in new UK life and pensions business as volatile stock markets kept potential clients away, overseas clients were not put off with foreign business during 2008 jumping 13% to £54bn.
New premium income from general insurance products, including motor, medical and household, also rose in 2008 from the year before.
Income from new general insurance business was up 3% over the 12-month period at £34bn.
ABI research also shows that the sector continued to expand during the year.
As banks and fund management groups laid off staff, employment in insurance firms rose 1.3%, accounting for almost one third of all financial services jobs.
Every day in 2008, UK insurers paid out nearly £300m to customers, up from £270m a day in 2007.
Of this, £239m was in pensions and life insurance benefits, and £57m in general insurance.
Dr Rebecca Driver, the ABI's director of research and chief economist, says the insurance industry in the UK has shown "resilience" in the recession, but must stay innovative to remain a world leader.
"Future regulation must therefore strike the right balance between proportionate consumer protection, and ensuring the sector is strong and competitive," she says.
"This will enable the industry to continue to innovate, and provide products that are relied upon by millions of families and businesses."
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