German non-life market expected to maintain strong capitalisation in 2020/21

Written by Adam Cadle

19/08/2020

The German non-life insurance market is expected to maintain strong capitalisation in 2020 and 2021, Fitch Ratings has said, supported by strong profitability and positive reserves run-off.

“The stable outlook on Fitch-rated German non-life insurers indicated that we expect to affirm the majority of ratings over the net 12-12 months,” the ratings agency said.

Insurers reported, on average, a stable regulatory Solvency II ratio of 283% at end-2019 (2018: 283%). The ratio is expected to have declined to 270% at end H1-2020.

“We forecast a strong underwriting performance in 2020 with a slightly increased net combined ratio of 95% (2019: 94%) driven by the coronavirus crisis, which we expect to result in additional claims,” Fitch added.

“This applies primarily for commercial insurers, due to claims from event cancellations and business interruption coverage.”

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