Best’s Market Segment Report: AM Best Maintains Stable Outlook on French Non-Life Market

Business Wire

LONDON--(BUSINESS WIRE)-- AM Best has maintained a stable market segment outlook on the French non-life insurance segment, supported by key factors that include broadly stable, albeit challenging, market dynamics, as well as the continued resilience of insurers against a backdrop of significant competition, pressure on technical margins and a persistent low interest rate environment.

A new Best’s Market Segment Report, titled “Market Segment Outlook: French Non-Life”, states modest-but-regular price increases in core classes of business, together with generally good diversification, has enabled insurance companies operating within this segment to maintain close-to-break-even technical profitability.

While intense competition continues to constrain price increases, AM Best expects rate developments for 2019 to remain in line with those observed during 2018, with increases of approximately 1.5% and 3% for motor and residential property classes, respectively. AM Best views favourably the fact that French non-life insurers have been able to increase rates year on year, but notes that price increases ultimately may prove insufficient to negate fully inflationary claims trends, for example, from higher court awards for bodily injuries and rising repair costs in the motor segment. A fundamental shift in pricing conditions, which would be necessary to strengthen technical margins, is considered unlikely in the short term.

A revision of AM Best’s market outlook on the French non-life sector to negative could arise should challenging market dynamics push the near break-even underwriting performance of the market as a whole into the red over a sustained period.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=284193 .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.