LONDON--(BUSINESS WIRE)--Budget Day 2020 brought generally positive news for U.K. insurance companies against a negative backdrop, according to an AM Best commentary.
Extra spending on flood defences, as announced by the U.K. Chancellor of the Exchequer in the Budget on March 11, will be welcomed by insurers. Meanwhile, the promise of increased investment in infrastructure, including funding for roads, railways and housing, should be a positive for insurance demand. Insurers already have seen significant flood claims in 2020 following significant loss events in 2018-2019. The increase in spending on flood defences to GBP 5.2 billion between 2021 and 2027 is likely to reduce the frequency and severity of claims in the worst affected areas.
The U.K. Chancellor of the Exchequer also set out measures to limit the threat of the COVID-19 outbreak on the U.K. economy. AM Best does not expect losses directly related to COVID-19 to be material for diversified U.K. insurance companies. However, the outbreak increases the likelihood of an economic downturn, which could have implications for insurers’ premium volumes, claims experience and investment returns.
To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=295321.
AM Best’s “Market Segment Outlook: United Kingdom Non-Life” is scheduled to be published during the week of 16-20 March 2020.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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