Dutch P&C outlook improves but life market continues to stagnate, says Moody’s

Moody’s Investors Service has changed its outlook on Dutch property & casualty (P&C) insurers to stable from negative, stating that rising premiums will help offset claims inflation.

At the same time, the agency has revised the outlook of Dutch life insurers to stable as interest rates rise.

Rising interest rates are positive for both P&C and life insurers as they will reduce pressure on investment returns that account for the bulk of Dutch life insurers’ earnings,” according to  Moody’s.

The agency noted that insurers have made “significant efforts” to reduce their costs, though further costs will still be required to offset depressed business volumes.

Louis Nonchez, an AVP and analyst at  Moody’s, said: “We expect P&C insurers to raise their prices relatively promptly in response to accelerating claims inflation and their relatively high catastrophe risk exposure. This, coupled with an economic recovery, should sustain premium growth.”

“Nonetheless, the Dutch life insurance market continues to stagnate, reflecting still depressed sales of individual life products despite opportunities arising from the coming pension reform, and the run-off of legacy business, forcing insurers to trim their cost base,” the report said.

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