Spain’s insurance market has continued to show resilience, with companies focusing on profitability as the country’s economy showed further signs of recovery, according to a new report from A.M. Best, entitled – “Sticking to the Basics Ensures Resilience of the Spanish Insurance Sector.”
Best said that “total gross written premium (GWP) contracted further in 2014, although the pace at which the market has shrunk has slowed. In particular, the non-life sector has been affected by competitive conditions for motor insurance, its predominant class of business, although a recovery in car sales is expected to assist this line in 2015.”
However, the report also notes that “while total GWP has contracted in the past few years, the Spanish insurance market has maintained its underwriting performance. It said the market continues to execute its business plans according to its traditional roots and remains relatively resilient.”
Insurance penetration in Spain remains “below European standards, Best said; “particularly in the life segment. In 2014, Spain’s total insurance penetration was 5.3 percent, compared to 9.1 percent in Italy and 9.5 percent in France. Historically, domestic consumers have not had the incentive to save through insurance products and principal guaranteed long-term deposits have been the bread and butter of the risk-averse household in Spain.”
However, Best also indicated that it “expects Spanish savers will continue to evolve towards a new reality in which long-term investment risk moves from state-guaranteed benefits to households’ own accounts, which, in turn, will create opportunities for life insurers.”
Source: A.M. Best
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