Bottom Line: CU and semantics

COMMERCIAL Union was talking the insurance market up as fast as GRE appeared to be talking it down the day before, but this did not do much for the shares. They mostly closed down a few pence more.

In fact, much of the apparent disagreement is a question of semantics, with CU seeing the rate of premium increases tailing off and the level falling in motor insurance. This is not inconsistent with GRE's statement that there are signs of the market softening. What else does it do when a boom tails off?

The two companies may be seeing slightly different points in the cycle, but there is no doubt that the top is in sight even if it has not been passed.

The next cycle will not be as violent as the last because the market is changing and companies are adapting faster, but insurance stocks are at a stage where it is hard to find strong reasons to buy.