Global P&C insurance 2020 outlook remains stable

The 2020 outlook for global property & casualty (P&C) insurance is stable, underpinned by continuing but slowing economic growth, solid capitalization and constructive pricing trends, Moody’s Investors Service said in its annual outlook.

However, these factors are tempered by increasing claim costs and low investment yields, which constrain profit margins. P&C insurers are faced with a persistent threat of catastrophes, and annual insured catastrophe losses are trending higher, with 2005, 2011 and 2017 ranking as the costliest years.

Insurers manage these exposures through catastrophe modelling, underwriting and reinsurance.

“P&C insurers are exposed to the economic consequences of climate change, mainly through its unpredictable effects on the frequency and severity of weather-related catastrophes such as hurricanes, floods, convective storms, droughts and wildfires,” said Moody’s vice president Bruce Ballentine. “Such shifting perils also represent an opportunity for P&C insurers to provide additional coverages and other risk mitigation products for clients.”

Traditional P&C insurance businesses aim to enhance their products and services through investments in technology. Technology-driven start-ups, or insurtechs, can disrupt certain insurance lines and functions, although traditional insurers often partner with or acquire such ventures.

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