Global property/casualty industry outlook stable for start of 2015: Moody's
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The outlook for the global property/casualty insurance industry is “stable,” according to an analysis released by Moody's Investors Service Thursday.
Moody's said in “2015 Outlook-Global P&C Insurance: Stable Outlook Spans Large, Mature Markets and High-Growth Emerging Markets” that U.S. commercial insurers are benefiting from the rate increases of recent years. It added, however, that U.S. rate increases are “tapering off, which could lead to margin compression by the latter half of 2015.”
In general, property/casualty insurance premiums should grow at low single digits in North America and most of Europe, said Moody's. Growth should be “considerably faster” in emerging markets, according to the New York-based rating agency.
Moody's said that materially stronger economic growth, rising pricing exceeding loss cost trends “coupled with robust capitalization” and a gradual rise in interest rates could shift the outlook to “positive,” while such factors as materially weaker economic growth, a multi-year decline in property casualty pricing with erosion in terms and conditions and an unexpected rise in loss costs causing adverse development of 5% or more of industry reserves could change the outlook to “negative.”
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