Best’s News & Research Service - April 23, 2018 09:22 AM (EDT)
Best’s Market Segment Outlook: Italian Non-Life Sector is Stable
- April 23, 2018 09:22 AM (EDT)
London //BestWire// - A.M. Best has a stable outlook on the Italian non-life insurance market. The sector has a good record of technical profitability, which is expected to be maintained in the medium term. A.M. Best estimates that over the period 2012 to 2016 inclusive, its net combined ratio averaged 94%, which compares favourably with that of other European countries. Strong competition is putting pressure on rates for motor business, which represents about half of the market’s total premium income, but increased use of telematics is supporting better claims experience and reducing fraud. Prospective performance is anticipated to benefit from insurers’ increased focus on profitable lines of business outside the motor market, which should contribute to maintain the sector’s combined ratio at approximately 95%.
A new Best’s Briefing, “Market Segment Outlook: Italy Non-Life” states that whilst the credit fundamentals of Italian non-life insurers appear solid, the market continues to face economic and political headwinds. The banking sector’s exposure to non-performing loans, which destabilised Italy’s financial sector in 2016, sharply decreased in 2017, but remains at an elevated level. In addition, political instability persists. As widely anticipated, general elections held on 4 March 2018 resulted in a hung parliament, with the consequence that the future government is expected to rely on a coalition of different political forces. This is unlikely to provide the political stability and leverage needed to implement the structural reforms hoped for by investors and local businesses.
To access a complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=272897 .
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