Although brokerage and fees increased by 3 per cent, acquisitions gave a slight boost. The underlying increase was 2 per cent. Group expenses increased by 4 per cent compared with the same period a year ago.
Performance was weakened during the first quarter by a slump in investment income, which fell from pounds 13.3m to pounds 10.9m because of lower interest rates in the US and the UK, although pre-tax profit benefited by pounds 5.1m as a result of Sedgwick's currency management operations and from the weaker level of sterling compared with the first quarter of 1992.
Sax Riley, Sedgwick's chief executive, said: 'When we announced our full-year results in February we said that we did not expect to see a significant improvement in the insurance market in 1993. As anticipated, the difficult conditions we faced in 1992 continue.' He added that premium rates were hardening in some areas of business in the US, 'but there is a long way to go before we see the upturn which everyone is anticipating'.
In London the group has seen a substantial rate increase in the aviation market, oil and gas and marine hull business, but at the same time it says there is a marked contraction in the size and capacity of the market.
Sedgwick is diversifying into other related areas, such as developing new finance for the Lloyd's insurance market through corporate capital. The group recently formed a company that will pioneer the concept of offering individuals corporate membership of Lloyd's with limited liability.
For the full year Sedgwick is expected to report pre-tax profits of pounds 75m- pounds 80m compared with pounds 58.2m.
The insurance broker Steel Burrill Jones said at its annual meeting that 1993 will be 'a year of consolidation'.Reuse content