A new Best’s Market Segment Report, titled “Market Segment Outlook: Italy Non-Life”, states a key element underpinning AM Best’s stable outlook for the segment is its strong technical profitability, which is deemed sustainable over the medium term. Most insurers have well-diversified books of business, and growth in more profitable segments has served to offset poorer performance for motor business. Technical results for motor are positive, but considerably weaker than for other risks.
The report adds that in recent years, technical results for the Italian non-life segment have been supported by consistent reserve releases, chiefly stemming from professional liability and motor. AM Best considers such reserve releases unsustainable over the long term, which is likely to have negative implications for profit margins. Nonetheless, continued underwriting discipline and further expansion into profitable non-motor lines are expected to support solid levels of profitability.
Despite Italy’s challenging macroeconomic environment, the non-life insurance segment remains resilient owing to its solid operational fundamentals. Nonetheless, further weakening in the economic environment impacting the assets and solvency levels of Italian non-life insurers, or sustained deterioration in market technical profitability, could cause AM Best to revise its outlook to negative.
To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=284421.
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Source: AM Best