AM Best is revising its outlook for the Spanish non-life insurance segment to negative from stable.
There has historically been a direct relationship between Spain's real gross domestic product (GDP) development and non-life premium growth in the country. In recent years, sustained economic growth has supported the development of the non-life insurance segment.
However, a new Best's Market Segment Report, "Market Segment Outlook: Spain Non-Life Insurance", notes the country's growth prospects remain subject to significant uncertainty.
In addition to the potential emergence of COVID-19 variants, the threat of further inflation and supply chain disruption following Russia's invasion of Ukraine (and the international sanctions imposed on Russia) could also undermine the economic rebound and consumer confidence, and reduce the growth prospects for non-life insurers. At the same time, increasingly volatile weather conditions and rising inflation could cause underwriting challenges, according to the report.
Moderating these negatives are the segment's good underwriting fundamentals: Spain's non-life insurance segment benefits from strong underlying technical performance and has been resilient through past challenging macroeconomic conditions. It is also one of the most profitable non-life segments in Europe.
AM Best notes that the segment's good underlying fundamentals provide a buffer to absorb some volatility from both increased climate risk and inflation.
To access a complimentary copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=319066.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Contacts:
Giannina Carbajal Ortiz
Financial Analyst
+31 20 308 5428
giannina.carbajal@ambest.com
Richard Banks
Director, Industry Research EMEA
+44 20 7397 0322
richard.banks@ambest.com
Mathilde Jakobsen
Director, Analytics
+31 20 308 5427
mathilde.jakobsen@ambest.com
Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
