(Tiper Stock Exchange) – EMEA insurers I’m in the middle of one “perfect storm”, since the volatility of the capital market, i recession risks and the increase ofinflation they represent a risk to companies insurance companies, partially offset by the increase in interest rates which continues to support returns on investment.
This is what emerged from a S&P Global Ratings report entitled “EMEA Insurance Outlook 2023: In The Midst Of The Perfect Storm”, from which it emerges, indeed, that these risks beyond these jeopardize solid operating performance for 2023.
“We expect operating performance to remain robust and inflation and recession risks will not fundamentally challenge the business position in 2023,” he said. Volker Kudszusanalyst at S&P Global Ratings.
For the non-life business, the agency forecasts that premiums will adjust to the increase in inflation rates, but there will be new and more substantial increases in reserves.
For life insurers, the positive impact deriving from the increase in interest rates could be offset by the higher risks deriving mainly from illiquid assets and derivatives.
S&P then maintains a negative view on the reinsurance sector since – explains Kudszus – “inflation-related increases in premiums may not be sufficient to strengthen profitability”. Overall, S&P analysts expect only one slight decline in earningsbut believe that i geopolitical risks – war in Ukraine, ECB, cybersecurity and others – will depress GDP growth and thus have an impact on gross premium levels.