General insurers have reached the peak of the current profit cycle and will need to focus on tighter cost management as they deal with more constraints in the period ahead, according to a leading industry analyst.JP Morgan and Taylor Fry released the 2013 edition of their General Insurance Barometer yesterday, warning that insurers face increasing competition, claims pressures, a slowdown in the growth of premium rates and adverse macroeconomic factors.JP Morgan's senior insurance analyst, Siddarth Parameswaran, said: "In 2014, the industry expects growth in claims and expenses to exceed premium growth."The industry finished the 2012/23 financial year in good shape, with most classes of personal and commercial business producing underwriting profits.However, industry participants expect that combined ratios (the measure of underwriting earnings) will weaken in a number of areas, including home and contents, commercial property, workers' compensation and professional indemnity.Parameswaran said some of last year's combined ratios were dressed up with reserve releases.The most profitable line of business last year was home and contents, with an average combined ratio of 78 per cent (the combined ratio calculates claims plus underwriting expenses as a percentage of premium income, and a combined ratio of over 100 per cent indicates an underwriting loss).The combined ratio for personal motor cars was 93 per cent, for commercial property it was 83 per cent, for commercial motor cars it was 97 per cent, and for public and product liability it was 107 per cent.The impact of competitive pressure can be seen in insurers' expectations for premium rate movements this year. After increasing home and contents premiums by an average of 15 per cent in 2012, and by 12 per cent last year, insurers say they expect to get increases of around five per cent this year.The average increase for all personal lines is expected to fall from eight per cent last year to five per cent this year.Insurers expect premiums to fall for several commercial classes, including commercial property, professional indemnity, and directors and officers' cover.Parameswaran said another issue the industry had to contend with was the rising cost of online distribution. Comparison sites and other online distributors are charging higher commissions and this is eating into earnings.