Life - Articles - Moody's global Life and P&C 2014 outlook

 Moody’s outlook for the global life insurance sector is stable amid a backdrop of gradually increasing interest rates and relative stability in the world economy. Improvements in both economic growth and unemployment will help reduce pressure on sales. However, low interest rates remain a concern in some European countries. Germany and the Netherlands are the most exposed to interest rate-risk owing to high policyholders’ guarantees and high duration mismatch between assets and liabilities.

 Moody’s outlook for the global P&C insurance sector is also stable, with the nascent economic recovery fuelling broad premium growth (moderate growth in North America and Europe, stronger growth in Asia and Latin America). P&C insurers maintain sound balance sheets with high-quality investments, adequate reserves and large equity accounts. These strengths are, however, tempered by sovereign and bank risk in the Eurozone and diminishing reserve cushions in North America and Europe.