LONDON--(BUSINESS WIRE)--AM Best is maintaining its market segment outlook on the United Kingdom non-life insurance market at negative. Key factors underpinning the outlook include an expectation of lower premium volumes due to the economic slowdown driven by the coronavirus (COVID-19) pandemic, as well as persistent pressure on underwriting performance from strong competition and claims inflation. The outlook also considers the ongoing political and economic uncertainty associated with Brexit and regulatory scrutiny of retail pricing practices.
A new Best’s Market Segment Report, titled, “Market Segment Outlook: United Kingdom Non-Life,” notes that insurers have welcomed changes to the personal injury compensation system set out in the Civil Liability Act, which became law on 20 December 2018. However, many of the provisions are yet to be implemented, and when they are, it is expected that the majority of any savings will be passed on to policyholders in the form of premium reductions.
Capital adequacy in the U.K. non-life market is generally robust and AM Best expects the sector to remain well-capitalised, in spite of pressure on underwriting earnings and COVID-19-driven financial market volatility.
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