A.M. Best Special Report: From West to East, Europe's Insurers Face Stormy Life and Non-Life Markets.OLDWICK, N.J. -- Non-life insurance premiums are flat or declining while claims costs are escalating in Western Europe's major markets. Meanwhile, life insurers' growth is threatened by turmoil in the credit and equity markets. In Central and Eastern Europe The term "Central and Eastern Europe" came into wide spread use, replacing "Eastern bloc", to describe former Communist countries in Europe, after the collapse of the Iron Curtain in 1989/90. , where many insurers from the West are seeking growth, some of the same pressures are coming to bear on the life and non-life markets. * Lackluster lack·lus·ter adj. Lacking brightness, luster, or vitality; dull. See Synonyms at dull. Adj. 1. lackluster - lacking brilliance or vitality; "a dull lackluster life"; "a lusterless performance" premium trends, rising claims costs and increasing damage awards have led to deteriorating de·te·ri·o·rate v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates v.tr. To diminish or impair in quality, character, or value: non-life underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results in Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). . * An upward trend in repair costs spans both the motor and property sectors, as do the effects of catastrophes such as windstorms Kyrill in 2007 and Emma in 2008. * Competition in motor markets has dampened premiums in Central and Eastern Europe, but steady car sales have had a mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. effect. * Growth has driven up expenses for insurers expanding in the CEE cee n. The letter c. region, and some have adopted acquisition strategies as a means to control costs and gain scale. * The appetite for unit-linked life products is waning in Western Europe as credit and equity markets struggle, leaving life insurers vulnerable to competition from other savings products. * Pension reforms in France, Germany and Italy offer possible avenues of growth, though in practice, results have been mixed and depend on factors such as government tax policies. * The CEE region has provided steady growth for Western European insurers, though volatility in the investment markets may reduce the appetite for unit-linked products that have driven growth in life business. * Tax changes and pension reforms in CEE countries have boosted the attractiveness of life products, but penetration remains low compared with other European countries. BestWeek subscribers can download a PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. copy of all full special reports or a combination of the report and all related spreadsheet files of the report data at no charge at www.bestweek.com. Nonsubscribers can visit www.bestweek.com for pricing information or call customer service for more information at (908) 439-2200, ext. 5742. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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