A.M. Best Assigns Stable Outlook to Germany’s Non-Life Insurance Sector

May 17, 2018

A.M. Best has a stable outlook on the German non-life insurance sector as Germany’s robust economy continues to drive growth.

According to the ratings agency, the country’s technical profitability is solid and is expected to remain so, underpinned by good underwriting discipline and sustainable rate adjustments.

A.M. Best said for the most part, non-life insurers benefit from very strong balance sheets, which positions them well to withstand evolving market conditions. Non-life premium grew 2.9 percent in 2017.

According to the Best’s Briefing, “Market Segment Outlook: German Non-Life,” the German economy grew in 2017, driven by rising exports, strong growth in the building sector, higher investment by companies, as well as record high employment rates and rising wages.

The rating analysts expect these fundamentals will persist through 2018 and form the foundation for further premium growth. However, A.M. Best notes that economic headwinds, the global rise of populism and trade protectionist policies could adversely impact Germany’s export dependent economy. Any related economic slowdown would likely subdue demand for insurance cover.

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