Best’s Market Segment Outlook: German Non-Life Sector Is Stable
A new Best’s Briefing, “Market Segment Outlook: German Non-Life,” states the German economy grew in 2017, driven by rising exports, strong growth in the building sector and higher investment by companies, as well as record high employment rates and rising wages. It is expected that these fundamentals, which supported non-life premium growth of 2.9% in 2017, will persist through 2018 and form the foundation for further premium growth. However,
In A.M. Best’s view, Germany’s non-life insurance market has solid earnings potential over the short to medium term, underpinned by robust underwriting profitability. The market has exhibited effective cycle management and good underwriting discipline over the past 15 years.
The low interest rate environment continues to put negative pressure on companies’ earnings, and yields are likely to remain depressed in the near term. In spite of this, investment income is expected to continue to make a stable, albeit relatively modest, contribution to earnings, as companies tend to favour a conservative investment strategy.
The report adds progressive advancements in digitalisation and data analytics increasingly shape the German non-life insurance market, as more participants focus on digital transformation and innovation.
To access a complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=272700.
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