Moody’s has released its global predictions and has suggested that P&C will remain stable.
Moody’s Investors Service Inc. has now released its predictions regarding the global property and casualty insurance industry, and they have designated its future as being “stable” for the next while.
This data was first released at the end of last week as Moody’s provided its industry forecasts.
Moody’s put out its “2014 Outlook – Global P&C Insurance” report and, within it, the firm showed that property and casualty insurance premiums will be continuing their growth within the range of low- mid- single digit rates in both Europe and North America. They also stated that these premiums will start to grow at a more rapid rate in Asia and Latin America. In those areas, it will likely be in the high single digits or even within the double digits.
The cumulative benefit of previous increases compensate for moderating North American property and casualty insurance rates.
The report from Moody’s stated that while the North American price increases are leveling off, there had previously been some increases and those benefits are still carrying over until now in earnings. This is particularly true among the American commercial liability products. The firm also suggested that low interest rates could cause some harm to investment income but will only bolster underwriting.
In Europe, Moody’s feels that the pricing outlook varies broadly from one nation to the next. It stated that the coverage markets in that continent are “benefiting from the gradual economic recovery plus reserve releases, mitigating the impact of lower investment returns.”
The report also indicated that the pricing for property and casualty insurance will be increasing in the low single digits in Japan, while there is likely to be a decline among other markets throughout Asia. This is a reflection of the competition environment from both international and local insurers. It was also forecasted that Japan will fall to second place as China rises to first place as the largest Asian market. This is likely to occur within the next two to three years. Strong growth in this sector is also anticipated in Latin America.