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Japanese Non-Life Premium Hike Won't Offset Headwinds

Japanese non-life insurers appear likely to raise premiums on their fire business from 2019, but the additional revenue is unlikely to offset the negative impact on profitability of the consumption tax hike scheduled for October 2019 and a cut in the statutory interest rate in April 2020, says Fitch Ratings. We expect these headwinds to push up the average combined ratio of large insurers by around 2 percentage points. 

Dai-ichi Boosts Leading Position in Australian Life with Suncorp Life

Dai-ichi Life Holdings, Inc. (the parent of The Dai-ichi Life Insurance Company, Limited (Insurer Financial Strength (IFS) Rating: A+/Stable)) has strengthened its top-two position in Australia's life insurance market with a deal to acquire 100% of Suncorp Life & Superannuation Ltd (SLSL) via TAL Dai-ichi Life Australia Pty Ltd (TAL, Dai-ichi Life Holdings' wholly owned Australian subsidiary). Dai-ichi Life Holdings announced on 9 August that it has signed a non-binding heads-of-agreement with Suncorp Group Limited (IDR: A+/Stable).

Korea Non-Life Insurers to Shore up Solvency Capital

Fitch Ratings expects South Korean non-life insurers to increasingly rely on issuing hybrid securities, subordinated debt or fresh equity to strengthen their solvency adequacy, given progressive tightening in local statutory risk-based capital measures and upward movement in interest rates. 

US Commercial Auto and Workers’ Compensation Insurance Market Update

These business lines have moved in opposite directions in recent years, with Commercial Auto posting seven consecutive years of statutory underwriting losses for the industry in aggregate, while workers’ compensation has reported strong underwriting gains from 2015-17.

US Workers' Comp Profits Strong, Weaker Pricing Ahead

The U.S. workers' compensation insurance market reported strong underwriting performance for the third consecutive year in 2017, with an industry statutory combined ratio of approximately 92%. However, a steady decline in premium rates from increased competition will ultimately lead to weaker underwriting results.

Teleconference Replay

U.S. Commercial Auto and Workers’ Compensation Insurance Market Update

Fitch Ratings Insurance Group teleconference to discuss key findings in recently published market update reports on the U.S. commercial auto and workers’ compensation insurance segments. 

China's Motor Premium Deregulation Squeezes Insurer Margins

Fitch Ratings expects weaker underwriting margins in China's non-life insurance sector due to deterioration in the claim ratio from the motor-class segment, after the regulator initiated another round of commercial motor-pricing deregulation in March 2018. This is likely to be made worse by higher policy acquisition costs from intense market competition.

Not All APAC Insurers' Hybrid Issues Are Created Equal

Instrument features and local regulatory frameworks are key to understanding the hybrid instruments issued by insurers in the Asia-Pacific. Unlike regulations for the banking industry, where regulators have universally adopted the Basel framework, rules for the insurance industry are fragmented. 

More Long-Term Care Charges a Potential Credit Negative

Life insurers' exposure to long-term care (LTC) liabilities will lead to material reserve changes in 2018 and into 2019, resulting in higher reported earnings volatility due to one-time charges. Depending on the level of reserves, ratings could be negatively affected. 

US Commercial Auto Insurance Underwriting Losses Persist

The commercial auto segment, which represents 13% of the U.S. commercial lines insurance market's net written premiums, remains problematic, Fitch Ratings says. Underwriters have executed several rounds of significant underwriting and pricing actions in recent years, but claims severity challenges and reserve deficiencies limit near-term improvement prospects.

Title Insurers Risk-Adjusted Capital Remains Very Strong

U.S. title insurers remain strongly capitalized following continued positive operating results, with market aggregate risk adjusted capital levels in 2017 comparable to the previous year according to a new report from Fitch Ratings. 

Dashboard Report

Adjusted Asbestos Survival Ratio Remains Below Eight Years

Following a review of recent years' asbestos related claims and litigation activity and insurers' paid and incurred loss experience, Fitch has raised projection for ultimate all-time U.S. industry incurred losses to $100 billion compared with a previous estimate of $90 billion.

ACA Payment Halt Not a Ratings Issue for Health Insurers

The suspension of risk-adjustment transfers under the Affordable Care Act (ACA) is a credit negative for companies currently owed money under the program but is unlikely to affect ratings for the largest U.S. health insurers.  

Tighter Rules to Boost China Life Insurers' Risk Profile

Fitch Ratings expects the risk profile of Chinese life insurance companies to improve in the longer term as the regulator has taken more stringent measures to crack down on short-term savings-type products and enhance asset-liability management and information disclosure. Asset-liability management is also one of the key areas the regulator is focusing on for the newly launched tax-deferred pension insurance product due to its long-term features.

Product Shift a Limited Boost to German Health Insurers

Growth in supplemental health insurance will only partly offset the impact on German health insurers of low investment yields and falling demand for full private health cover.

UK Equity Release Mortgages Generally "Not Risky"

UK equity release mortgages (ERMs) are not generally treated as "risky assets" in Fitch Ratings' assessment of insurers' investment and asset risks as part of our rating analysis thanks to conservative loan-to-value ratios (LTVs) and limited exposure to short-term falls in property values.

Belarus Insurance Sector Likely to Remain Dominated by State-Owned Companies in the Medium Term

In 2017, half of the 16 insurance companies in Belarus were state owned, and these state-owned firms accounted for 88% of the market's gross written premiums (GWP). The remaining market participants were split between privately owned domestic and foreign-owned companies.

Austrian Life Insurance Market to Keep Shrinking in 2018

Profitability will remain under pressure as insurers continue to use a large part of their earnings to bolster provisions in anticipation of continued low investment returns. In contrast, the non-life sector is relatively profitable and growing slowly but steadily.

Fitch Publishes German Life Insurance Peer Review

The 'Capitalisation and Leverage' rating factor has a high influence on German life insurers' ratings. Fitch assesses the capital adequacy of AL, LV and NG as 'Very Strong', while SL and VL are assessed as 'Strong'.

Fitch Upgrades Asahi Life's IFS to 'BBB-'; Outlook Stable

Fitch Ratings has upgraded Japan-based Asahi Mutual Life Insurance Company's Insurer Financial Strength (IFS) Rating to 'BBB-' (Good) from 'BB+' (Moderately Weak) and its Long-Term Issuer Default Rating (IDR) to 'BB+' from 'BB'. The Outlook is Stable. 


Update on US Life Insurers’ Exposure to Commercial Real Estate

Fitch Ratings hosted a teleconference to discuss key findings in the recently published update report on US Life Insurers’ Exposure to Commercial Real Estate.

Strong Commercial Mortgage Performance to Continue for U.S. Life Insurers

Fitch Ratings expects relatively stable commercial real estate fundamentals to drive strong investment results for U.S. life insurers over the next 12 to 24 months. Loss experience on life insurers' mortgage loan investments has been very favorable over the past year as evidenced by low credit impairments and a low percentage of troubled mortgages.

Carrier Management Magazine

Guest Column: Uphill Battle Continues for Reinsurers After Rough 2017

Reinsurers demonstrated resiliency following record-high catastrophe losses in 2017, though the sector still faces competitive market conditions that are serving to dampen price increases in 2018, as detailed by Brian Schneider in a guest column that ran in Carrier Management magazine.

Teleconference Replay

Personal Lines Insurance Market Update

Fitch Ratings Insurance Group hosted a teleconference to discuss key findings in the recently published update report on the U.S. personal lines market.

US P&C Personal Lines Results Worsen Despite Auto Improvement

Underwriting losses in the US P&C personal lines segment moved higher for the fourth straight year in 2017, though this time another segment drove the increase.

Rating Action

Fitch Assigns Hanwha General Insurance First-Time IFS of 'A'; Outlook Stable

The rating reflects HWG's adequate capital buffer, improving operating profitability and solid market presence in the competitive local non-life market.

Accounting Change Brings Volatility to Property/Casualty (Re)insurers' Earnings

A change in accounting for equity securities is adding volatility to 2018 net earnings for many (re)insurance companies that report under U.S. GAAP, particularly those with significant allocations to equity investments/

Teleconference: US Hurricane Season 2018

Fitch hosted a teleconference to discuss key findings in the recently published report on the 2018 hurricane season. The report provides thoughts on the effects of the active 2017 hurricane season on insurers, and their preparedness for the 2018 season.

Japanese Non-life Insurers' FYE18 Results Strong but Affected by Overseas Weather-Related Events

Underwriting results for Japan's top-four non-life insurers remained strong but overseas weather-related losses (including US hurricanes) affected their results in the financial year ended March 2018 (FYE18), says Fitch Ratings in a new report. 

Experts Foresee Near Normal Hurricane Season for 2018

After enduring one of the more active hurricane seasons in recent memory, U.S. P/C Insurers are well positioned for what is pointing to an average hurricane season in 2018, according to Fitch Ratings in its annual hurricane season preview report. Early forecasts of the upcoming June 1 to November 30 hurricane season suggest that environmental forces that serve to encourage the development of tropical storm activity appear to be relatively neutral and portend a near-average season.

US Commercial Insurance Poised for Better 2018 Performance

Following a rough 2017, US property/casualty (P/C) insurers are positioned for better performance this year in the commercial insurance market sector.

US Cyber Insurance Growth Continues to Accelerate

Fueled by increasing cyber-attacks and regulatory requirements, cyber insurance coverage continues to be one of the fastest growing segments and represents a significant growth opportunity for US property/casualty (P/C) insurers.

Global Reinsurers to Rebound From Catastrophe Losses

The sector outlook for global reinsurance remains negative given intense market competition, the influx of alternative capital that continues to pressure pricing and persistently low investment yields that strain reinsurer profitability.

D&O Liability Underwriting Results Fall to Seven-Year Low

"Some larger D&O insurers are seeing higher segment loss ratios, in part, due to the surge in federal class action suits filed last year," said Jim Auden, Managing Director, Fitch Ratings. PropertyCasualty360Increasing Underwriting Challenges in D&O Insurance

Does Blockchain Represent a Paradigm Shift for Insurance?

We view blockchain as a potential game-changing technology for the insurance industry over the long term.


Related Research

Stable Leverage and Coverage Metrics Expected for North American Life Insurers in 2018

The combined impact of tax reform and a modest reduction in outstanding debt led to a very modest reduction in the aggregate financial leverage ratio for YE 2017 among US-based life insurers.


US P/C & NA Life Insurers’ Financial Leverage and Debt-Servicing Capacity

Fitch Ratings hosted a teleconference to discuss U.S. property/casualty insurers and NA life insurers.

US P/C Insurer Financial Leverage Returns to 2015 Levels, Fixed Charge Coverage Dips

US property/casualty insurers' financial leverage returned to 2015 levels as a 2016 uptick proved to be temporary. The financial leverage ratio for Fitch's rated universe of debt issuing public insurers was at 'A' implied debt rating guidelines at 22.8% at YE 2017, down from 24.2% at the prior year end.

Progress on Global Insurance Regulation; Hurdles Remain

The International Association of Insurance Supervisors has reached an agreement on the next steps for the insurance capital standard. ICS version 2.0, which aims to reduce differences across jurisdictions, will be implemented in two phases.

Derivatives Central to European Life Insurers' Risk Management

We expect that low interest rates and the significant share of products with options and guarantees within life insurers' books will continue to be a driver for the use of derivatives for asset-liability management and investment portfolio management.

UK Motor Premiums to Edge Down as Whiplash Rules Approach

A reduction in UK motor insurance premiums appears to be underway as insurers anticipate reforms to curb whiplash claims and reduce lump-sum payments for long-term care costs and lost earnings.

Key Macro Risks for Global Insurance Sector

"Competitive market conditions and low investment yields, particularly in the US and UK, are making it difficult for (re)insurers to earn adequate returns," said Mark Rouck, Fitch's Group Credit Officer for Insurance.

European Reinsurers Confirm Resilience to Catastrophes

European reinsurers' 2017 results support Fitch Ratings' view of the sector's resilience to catastrophe losses. With capital typically above companies' target levels, we do not expect material premium rate rises this year, despite some increases in the January and April renewals.

Strong Equity Markets Boost US Life Insurers' 2017 Results

Strong equity markets and favorable underwriting performance led to improved profitability for the majority of US life insurers in 2017. Pre-tax operating income increased by 9% in 2017 for US publicly traded life insurers in Fitch's rated universe. 

Italian Life Insurers' Results under Pressure; Strong Non-life Combined Ratios

Life net inflows declined in 2017 as insurers focused on sales of capital-light products, such as hybrid and unit-linked contracts, and protection business, moving away from selling guaranteed products. Moreover, policy surrender rates increased for the first time since 2012.

First Underwriting Loss in Six Years for P&C Insurers

Property and casualty (re)insurers endured a trying 2017 with a compilation of latest financial results for a group of public companies showing an aggregate underwriting loss for the first time since 2011.

APAC Insurance Regulator Actions Show Proactive Approach

The latest interventions followed increases in minimum regulatory capital in the Philippines and exposure of under-reserving in New Zealand, which is testament to the regulators' active approach. 

Ogden Reform Will Partly Reverse UK Insurer Earnings Hit

The UK government's planned reforms of the Ogden discount rate will partly reverse the earnings hit caused by the previous change to the rate in February 2017. Insurers' earnings will be boosted by one-off reserve releases. 

Asset Concentration Risk Constrains Italian Insurers' Ratings

Insurers' rationale behind this investment strategy is to support guarantees on life insurance with-profit liabilities with yields on Italian government bonds. The strategy is also driven by the need for insurers to minimise the risk of lapses by investing in Italian bonds yielding more than the average guaranteed crediting rate for policyholders.

UK Non-Life Insurers Results Improve on Motor Premium Rate Rises

Our sector outlook for 2018 remains negative, reflecting ongoing uncertainty around the timeline for the implementation of Ogden reforms and our expectation that intense competition, claims inflation and increasing use of price comparison websites will continue to pressure insurers' earnings in household and motor insurance.

rating action

Downgrade: Prudential plc on UK Demerger Announcement

Rating actions include a downgrade of The Prudential Assurance Company Ltd's (PAC) and Prudential's US subsidiaries' (collectively Jackson) Insurer Financial Strength (IFS) Ratings to 'AA-' from 'AA'.



Keith Buckley

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Jeff Liew


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Harish Gohil


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Eduardo Recinos


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North America

Julie Burke


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David Turner

Business Relationship Head

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Mee Ryung Song


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Diego Alcazar


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North America

Brad Istwan


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