Italian life insurance outlook negative

Written by Dan McGrath

22/6/2023

The outlook for Italian life insurers is negative, a report by Moody’s Investors Service has said, reflecting lower sales of saving policies and increased lapse risk as rising interest rates make other investment products more attractive.

Although rising interest rates are set to help the investment performance of Italian life insurers, this impact is set to be gradual as life insurers hold relatively long dated assets to match the long tenor of their liabilities, the report stated.

Italian life insurers proved resilient during the low interest rate era, managing to hold a strong margin between their investment returns and guaranteed

However, the report from the investors service has stated that the outlook for the Italian property and casualty (P&C) insurance industry is stable, with rising prices set to offset higher claims frequencies and inflation in 2023.

Although the Italian economy grew strongly last year, Moody’s expects a sharp slowdown in 2023 and 2024, with relatively high unemployment and lower disposable incomes as a result consumer price inflation, which will likely hold back premium volumes, in particular for discretionary insurance and saving products.

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