European insurers target overseas amid investor pressure
European insurers are developing their overseas operations due to pressure from investors to improve margins, according to a new report from AM Best.
The firm said that this pressure is due to the fact that their traditional domestic markets remain mature and saturated. Insurers also face investment challenges from the very low interest rate environment and well-capitalised companies are increasingly looking for innovative ways to deploy capital, said the rating agency.
The report showed that European insurance markets have tended to be “stagnant, with muted premium growth in 2014”, with Italy noted as an exception, due to sharp increase in demand for life products.
Regions that are a particular target for European insurers, according to AM Best, include Asia Pacific, Central Eastern Europe (CEE), Latin America and Turkey, due to their low insurance penetration and growing gross domestic product (GDP).
“Economic development is expected to encourage the emergence of a middle class, which in turn is projected to increase demand for life products – particularly savings offerings – and non-life insurance, such as retail insurance linked to motor and household protection,” said AM Best.
