General Insurance Article - Outlook for Property and Casualty Insurance stable for 2018

 The rating agency's report does not constitute a rating action. This report is part of a series of 2018 Credit Outlooks that provide insight into next year's credit conditions across all sectors. See more at www.moodys.com/2018outlooks.

 "Continued economic expansion will support premium growth for the global P&C insurance sector in 2018," says Dominic Simpson, Vice President and Senior Credit Officer at Moody's. "We especially see good growth potential in China and other emerging markets which, for example, have P&C insurance penetration rates in the range of 1.5% to 2% of GDP, well below North America, Europe and the worldwide average which is close to 3%. Growing household income and supportive policies in emerging economies will boost insurance penetration, driving P&C market growth in excess of GDP growth".

 In addition, capitalization will likely remain robust and resilient to a range of stress scenarios, with the US insurers absorbing 2017 hurricane losses mostly from earnings. This is despite rising claims costs and lower reserve releases. Still low investment yields, however, will curtail profit margins, despite a gradual increase in interest rates and a continued shift towards higher risk investments in some markets. Nevertheless, low rates promote underwriting discipline, according to the rating agency.

 Finally, further investment in technology and innovation is improving efficiency for global P&C insurers. However, Moody's notes that technological change will attract competition and reduce risk pools in some business lines.

 Moody's report, entitled "P&C Insurance -- Global: 2018 Outlook stable as further premium growth offsets investment and reserving headwinds,"