[August 01, 2018]

A.M. BestTV: European Insurers Face a Three-Sided Risk Front, Say A.M. Best Analysts

In this ^A.M.BestTV episode, Greg Carter (News - Alert), managing director, analytics, Catherine Thomas and Mahesh Mistry, both senior directors, analytics, A.M. Best, said insurers in Europe's insurance markets face a mixture of economic risks, which are tied to interest rates, inflation and geopolitical risks, as well as traditional insurance underwriting risks. Click on http://www.ambest.com/v.asp?v=europeanmarket818 to view the entire program.

Presently, the analyst said, the largest concern for Europe's insurance markets is Brexit.

"Brexit is really about the ability of insurers to conduct cross border business in the European Union single market," said Thomas. "Lloyd's, the London Market and other U.K. commercial insurers are really concerned about losing that business. … Insurers have been putting contingency plans in place and establishing EU subsidiaries that would be able to continue to access business in the EU post-Brexit. Over the last six months, insurers have really been accelerating those plans."

Mistry said, "The European insurance markets are extremely diverse. Countries like Spain have exceptional combined ratios being produced by insurers, and others, like the United Kingdom and France, have combined ratios that are relatively marginal. The competition is there and expected to remain."

Carter highlighted how Solvency II is encouraging mergers and acquisitions.

"This comes because of the diversification benefits companies receive in their capital calculations under the Solvency II regime. Buying a different book of business, a diversifying book of business can actually reduce a company's overall capital needs without necessarily adding to the bottom line," said Carter.

Recent episodes of ^A.M.BestTV include:

• How A.M. Best Analysts Evaluate Mortgage-Related Insurance-Linked Securities Tranactions: Emmanuel Modu, managing director, insurance-linked securities, and Wai Tang, director, insurance-linked securities, A.M. Best, examine how the rating agency evaluates mortgage-related insurance-linked securities transactions: http://www.ambest.com/v.asp?v=mortgageils818.
• IMCA: Account-Based Focus and Digital Strategies Are Remaking Insurance: Marketers at the Insurance Marketing and Communications Association Conference said their challenge is to keep up with fast-changing technologies, competition, branding and aligning their work with other internal departments: http://www.ambest.com/v.asp?v=imca718.
• Special Presentation on Catastrophe Insurance: The 'Cat' Grows a Longer Tail: Insurance industry experts, modelers and government officials examine the mix of litigation, legislative initiatives and governmental interventions that have changed the rules for many worldwide disaster claims: http://www.ambest.com/v.asp?v=longtail2018.
• New Technology (News - Alert) and Business Models Help Grow Life Business in Asia, Says Sun Life's President and Chief Executive Officer: Dean Connor, president and chief executive officer, Sun Life Financial Inc., said the company's early roots in some Asian markets are being enhanced by several new product initiatives and technology: http://www.ambest.com/v.asp?v=connor718.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2018 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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