LONDON (Reuters) - British household insurance could next year see its first underwriting loss since 2007, as benign weather conditions have kept prices low in a competitive market, consultants Deloitte said on Thursday.
Aviva, RSA and Direct Line are among firms offering household insurance, along with international ones operating in Britain such as AXA and Allianz.
Good weather reduces demand for household insurance, pushing down prices, while price comparison websites enable consumers to shop around for the best deal, said James Rakow, an insurance partner at Deloitte.
"The market seems to need a reminder of the size of catastrophic losses to maintain premium levels," Rakow said.
Net combined ratios for the sector - a measure of profitability in which a result above 100 percent indicates a loss - will improve in 2015 to 90.3 percent from 92 percent in 2014, but worsen to 98.3 percent in 2016, Deloitte said.
"With ratios so close to 100 percent in 2016, the risk of the home insurance industry reporting an underwriting loss ... is at its highest for the last decade."
Gross written premiums will fall by around 5 percent this year to 6.3 billion pounds, and by a further 3 percent in 2016, to 6.1 billion pounds, Deloitte said.
Deloitte analysed data from 30 insurers operating in Britain.
(Reporting by Carolyn Cohn, editing by David Evans)
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