The life insurance sector have been issued a prediction of their short, medium and long term future by Swiss Re.

The organisation have produced a study which reveals that the whole insurance industry will be on the downturn throughout the rest of the year, but signalled out life insurance as an insurance which could see a bright future.

Currently Aviva have revealed that they have noticed a 5% drop in life insurance policies being underwritten within the first nine months of the financial year.

The revelation has been tempered by the fact that the drop is probably due to the change in Capital Gains Tax Changes over the past year. New business has since dropped by 7%.

One of the authors of the study, Daniel Staib, reportedly commented: "As the economy recovers, we expect both higher life premiums and better investment results as asset prices are expected to improve," said Daniel Staib, one of the authors of the study on insurance markets in 2008. This will not only have a positive impact on profitability, but also on shareholder capital and the ability to raise capital. In the medium and long-term, the outlook for life insurance remains positive."