RPT-Fitch: Stable Outlook for UK Non-Life Insurance but Margins Remain under Pressure

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RPT-Fitch: Stable Outlook for UK Non-Life Insurance but Margins Remain under Pressure
Posted on : Dec 13, 2013 6:49am

Fitch Ratings says in a new report that UK non-life insurers will continue to face pressure on their underwriting margins due to fierce competition, making sustaining underwriting profitability one of the main challenges for 2014.

However, strong risk-adjusted capitalisation, which the agency expects to remain robust over the outlook horizon, should continue to support the Stable Outlook for UK company market and UK London market insurers.

Fitch expects the growth of alternative capacity to add further pressure to London market insurers, although they are considered to be more resilient to declines in the pricing environment than UK company market insurers as their business tends to be specialised, high-margin niche business. UK company market insurers, selling predominantly retail products to individuals and small/medium-sized businesses, are expected to remain under significant competitive pressures on already thin margins.

Fitch expects investment income

Link to Fitch Ratings' Report: 2014 Outlook: UK Non-Life Insurance