The outlook for insurers in mature markets such as the United States, Japan and some Western European is expected to remain stable this year, but caution remains for underwriters in some less mature markets, according to Standard & Poor's Corp.

This year could be a tough one globally as insurers seek opportunities for growth, said S&P's Global Ratings unit in “Insurers Worldwide Confront an Interlocking Puzzle of Factors That Make Growth Tough to Find,” released last week.

“For 2016, we expect growth in insurance gross premiums (excluding reinsurance) worldwide trending between 3% and 5%, operating earnings (excluding realized and unrealized investment gains and losses) clipping about 7% and capital remaining strong at the 'A' rating level, buffered by stable underwriting earnings and strong asset quality,” said S&P, particularly for property/casualty insurers domiciled in the U.S., Japan, U.K., Germany and France.

But the ratings agency remains cautious for insurers in markets such as China, Brazil, Russia and South Africa. “That's true even though prospective earnings growth in the latter group will likely outrun those in the former, much as it did in 2015.”

Overall, the report said that “although some insurers will manage because of sufficient capital headroom, others may face tough going this year, making downgrades more likely.

“While underwriting performance remains steady, it has seen some modest deterioration,” S&P analysts wrote in the report.

It cited a variety of factors that will affect insurers it rates this year, “with some threats being interconnected and others specific to an insurer's home region.” But all insurers face an “overarching challenge” in the possible hard landing of the global economy, driven by slowing growth in China combined with falling oil and commodity prices, according to the report.

“For credit markets, worries about a debt overhang in emerging markets and the energy sector may undermine growth prospects and dim the outlook for both profits and ratings among global insurers,” said S&P.

Among regional challenges, the report noted:

• For North American insurers, 2015 and 2016 credit and equity jitters “won't make for a year of jitters,” said S&P, although investment income remains a concern.

• While S&P said it expects Asia-Pacific insurers to experience more volatile capital and investment earnings over the next two years, it also expects them to post some premium growth. The report offers a caveat that some insurers have turned to “risky assets” to increase returns, “which could lead to capital erosion in the event of market dislocation.”

• In Latin America, higher interest rates could help insurers in Mexico and Brazil, according to S&P.

• Western European insurers will continue to contend with persistent low interest rates, which will be felt particularly by life insurers with less diversified risk profiles and relatively weaker capital positions.

• For the Central and Eastern Europe/Middle East/Africa region, “regulation, along with oil price concerns, add another wrinkle as capital and solvency requirements come into play,” said S&P.