Moody’s adjusts global P&C insurance outlook to stable

Ratings agency Moody’s has changed its outlook for the global property and casualty (P&C) insurance sector to stable from negative for 2025.

Bạn đang xem: Moody’s adjusts global P&C insurance outlook to stable

The stable outlook is driven by factors such as improved personal lines pricing adequacy, commercial lines pricing remaining supportive of healthy results, and the fact investment income is expected to remain strong.

Xem thêm : Poll finds Americans blame insurance companies and suspect for CEO’s death

Analysts at Moody’s explained that this change reflects their view that increases in the price of personal lines P&C insurance, particularly in the United States (Aaa, negative), United Kingdom (Aa3, stable), and some continental European countries, will be sufficient to offset rising claims costs.

It should be noted that while prices for some sectors of commercial lines P&C insurance have peaked, Moody’s analysts believe they will remain high enough to support strong results in this sub sector for at least another year.

The firm explained that reinsurance prices are unlikely to fall significantly, and attachment points remain stable, insurers will remain exposed to high-frequency, lower-severity natural catastrophes, resulting in some earnings volatility, although “their capital is well protected.”

There are however some factors like pricing declines driving underwriting losses, increasing claims inflation leading to underwriting losses or reserve strengthening, significant increases in retained catastrophe risk, and sizeable adverse reserve development in casualty lines that could drive the outlook to change to negative.

However, if there is strong cross-cycle pricing adequacy for both personal and commercial lines which drives sustainable underwriting profits, benign claims inflation and litigation environment, decreased catastrophe exposure through underwriting actions or reinsurance, and strong favourable reserve development across lines of business the P&C insurance sector outlook can be changed to positive.