Bottom Line: GA is well placed

THE insurers have learned quickly since last week, when Guardian Royal Exchange worried the stock market with its openness about increasing competition and 'softening' premium rates. Yesterday's results from General Accident, noticeably more upbeat than its rivals, were initially greeted with an 8p rise in its share price despite a more modest increase in its dividend.

After the difficulties of 1990- 1992, the insurers are heading for a bumper 1994. General Accident is forecast to make pounds 360m- pounds 385m, up from pounds 295m last year, itself a record.

But this very success will itself attract more competition - perhaps led by the privatised French insurers. Investors will become increasingly nervous.

General Accident looks well placed to meet the turning insurance cycle. It made money on UK underwriting for only the third time in 20 years, and hopes to improve on that pounds 59.7m profit this year. With the UK representing only a third of its general insurance business, it is less exposed to downturn than some rivals, notably Sun Alliance.

The company has struggled to make much of a success of 1-2-1, its direct insurance arm, but profits from life insurance, which is more reliable, are growing rapidly, up from pounds 34.8m to pounds 49.1m. A recent internal transfer of the ownership of the UK life company valued GA Life at more than pounds 375m.

General Accident's management is well regarded, but for all this, at the moment there is no compelling reason to buy the shares.