Only their spread of income, principally from life insurance, has helped to support profits during these lean times.
But with 1995 expected to mark a peak year of profitability, the optimists believe that the current cycle could be different from every other in recent experience. Typically, a downswing in the insurance cycle saw underwriting losses soar as rates tumbled, a situation which often combined with a decline in investment returns to put a double squeeze on the composites’ profits. In the past, insurance companies have vied with banks as the Neanderthals of British industry. But, as ever, share prices are already looking ahead to the downturn and the sector has only barely outpaced the rest of the market over the past year.

Keith Harris, the former head of Montagu, will become the chief executive of HSBC Investment Bank.. The UK composites are less than a month away from their reporting season and all the indications are that results for 1995 will beat what was already a bumper year in 1994. The current icy temperatures nothwithstanding, recent benevolent weather conditions and lower claims mean that profits will again be led by the domestic market for non-life business. Capel and Montagu will be preserved for business within the UK but will be prefixed with HSBC.

HSBC said it would drop the James Capel and Samuel Montagu names for Continental European business, opting instead for HSBC Investment Banking. James Capel and Samuel Montagu, two of the best-known names in UK financial markets, are to be merged into a new entity, HSBC Investment Banking. Announcing the biggest shake-up of its investment banking operations since it bought the stockbroking firm James Capel in 1984, HSBC said the move would eliminate confusion and highlight the powerful parent. This compared with a rise of less than 1 per cent in the year to December.. So did output of semiconductors, mobile phones and kerosene heaters, due to cold weather.The Economic Planning Agency said separately that investment spending by Japanese firms was expected to grow 4 per cent in the year to March and another 2.4 per cent the following quarter. It was the third monthly rise in a row, and manufacturers said they expected even bigger increases in January and February.Public works projects contributed to the increase in output last month.