A.M. Best Special Report: From West to East, Europe's Insurers Face Stormy Life and Non-Life Markets

2008-10-06 20:04:03 -

www.ambest.com - Non-life insurance premiums are flat or declining while claims costs are escalating in Western Europe's major markets. Meanwhile, life insurers' growth is threatened by turmoil in the credit and equity markets. In Central and Eastern Europe, where many insurers from the West are seeking growth, some of the same pressures are coming to bear on the life and non-life markets.

-- Lackluster premium trends, rising claims costs and increasing damage awards have led to deteriorating non-life underwriting results in Western Europe.

-- An upward trend in repair costs spans both the motor and property sectors, as do the effects of catastrophes such as windstorms Kyrill in 2007 and Emma in 2008.

-- Competition in motor markets has dampened premiums in Central and Eastern Europe, but steady car sales have had a mitigating effect.

-- Growth has driven up expenses for insurers expanding in the CEE region, and some have adopted acquisition strategies as a means to control costs and gain scale.

-- The appetite for unit-linked life products is waning in Western Europe as credit and equity markets struggle, leaving life insurers vulnerable to competition from other savings products.

-- Pension reforms in France, Germany and Italy offer possible avenues of growth, though in practice, results have been mixed and depend on factors such as government tax policies.

-- The CEE region has provided steady growth for Western European insurers, though volatility in the investment markets may reduce the appetite for unit-linked products that have driven growth in life business.

-- Tax changes and pension reforms in CEE countries have boosted the attractiveness of life products, but penetration remains low compared with other European countries.

BestWeek subscribers can download a PDF copy of all full special reports or a combination of the report and all related spreadsheet files of the report data at no charge at www.bestweek.com.

Nonsubscribers can visit www.bestweek.com for pricing information or call customer service for more information at (908) 439-2200, ext. 5742.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Company
Analysts
Michael Zboron, +(44) 20 7626 6264
michael.zboron@ambest.com
or
Vasilis Katsipis, +(44) 20 7626 6264
vasilis.katsipis@ambest.com
or
Public Relations
Jim Peavy, +(1) 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, +(1) 908-439-2200, ext. 5378
rachelle.morrow@ambest.com