Banks may soon play a bigger role in distributing general insurance policies, as insurers look for ways to sell their products to sections of the community that are under-insured.KPMG yesterday released its annual General Insurance Industry Survey, with the finding that the industry's 2005/06 aggregate net profit of $3.5 billion was a record.Most the industry's numbers were up: gross written premium of $26.1 billion was 3.5 per cent higher than the 2004/05 figure, underwriting profit was up 26 per cent to $2.2 billion and return on equity was up from 22.8 per cent in 2004/05 to 22.9 per cent.The chair of KPMG Financial Services, Andries Terblanche, says that despite the strong result there are worrying signs for the general insurance sector. "With strong profitability over the past three years, competition has started to intensify," Terblanche said."There has been downward pressure on premiums in the commercial market for some time and we are starting to see it in the personal lines as well."Terblanche says one strategy insurers are adopting to maintain growth is packaging simple, low-cost cover with bank products in a bid to reach parts of the market that are under-insured.Typical of the trend is National Australia Bank's Protected Loan. Launched in March, it is a bundling together of a home loan with loan insurance and home and contents cover underwritten by MLC. MLC reports that sales of loan cover policies have increased by 50 per cent since the introduction of Protected Loan. Terblanche says insurers are looking at a range of options that include product packaging, bank distribution, telephone and internet sales and product simplification.