Fitch Highlights Key Macro Risks for Global Insurance Sector

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Tuesday, April 17, 2018 /11:20 AM/ Fitch Ratings 

The global insurance industry is weathering key macro risks that could have a lasting effect on the sector globally, risks that Fitch Ratings identifies in a new report that details global and regional insurance sector outlooks.

"Competitive market conditions and low investment yields, particularly in the U.S. and U.K., are making it difficult for (re)insurers to earn adequate returns," said Mark Rouck, Fitch's Group Credit Officer for Insurance.

The aforementioned headwinds underpin Fitch's negative sector outlooks on the reinsurance and non-life sectors. Conversely, benign credit market conditions contribute to a stable life insurance outlook, and gradual increases in market interest rates could further benefit life insurers.

"Fitch is keeping a close eye on key macro risks throughout the world including a possible negative turn in the credit cycle, a more rapid than anticipated increase in interest rates, and a potential deceleration of growth in China," said Rouck.

Fitch's report provides perspective on which insurance markets throughout the world will feel the brunt of these effects most acutely. It also addresses the scope of potentially affected insurers within Fitch's rated universe.

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