LONDON--(BUSINESS WIRE)--A.M. Best has a stable outlook for Spain’s non-life insurance sector, according to a new briefing. Premiums in the sector grew by an estimated 4% in 2017, having benefitted from the country’s continued economic recovery. Expansion in the range of 3% to 4% in premium revenue is expected for 2018, particularly for the main lines of motor, health and homeowner insurance.
A new Best’s Briefing, “Market Segment Outlook: Spain Non-Life” states that whilst economic growth is forecast to moderate in the medium term, it should remain resilient and continue to be favourable to the insurance industry. However, A.M. Best notes that these prospects could be dampened by the elevated political uncertainty which has prevailed since the controversial Catalonia independence vote in October 2017.
Furthermore, recent regulatory changes, the most notable impacting motor (the largest line of business) and funeral expenses insurance, have created challenges, although in A.M. Best’s view, most insurers have adapted well by swiftly revising reserving and pricing policies.
A.M. Best’s stable outlook on the non-life segment is underpinned by the market’s robust credit fundamentals, primarily stemming from a consistently solid technical profitability, amongst the strongest in Europe. The sector’s balance sheet strength is considered solid, benefitting from strong risk-adjusted capitalisation and a generally prudent approach to reserving. A.M. Best also notes that enhanced enterprise risk management practices have enabled companies to adapt to the changing economic landscape and adequately respond to political turbulence.
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