Cost cuts stabilise profitability of Dutch life insurers, non-life improvements expected
Cost cuts have offset low interest rates and declining premium volumes on legacy portfolios, stabilizing profitability of Dutch life insurers, according to Fitch Ratings.
This is, however, unlikely to lead to a significant improvement in earnings as the business mix shifts to lower margin capital light savings products, with strong competition between the providers, the ratings agency noted.
Non-life combined ratios increased in 2016 mostly driven by competitive pricing and claims related to an extreme hailstorm in June. Fitch expects margins to improve in 2017 reflecting expectations that insurers will cut costs, improve claims management and increase premium rates.
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