Spanish insurers’ outlook neutral reflecting strong credit fundamentals

Written by Adam Cadle

29/11/2021

Fitch Ratings has assigned a neutral outlook to the Spanish insurance sector for 2022, reflecting its expectation that the industry will maintain its strong credit fundamentals, in both the life and non-life insurance sectors.

Overall profitability of the sector is expected to remain strong in 2022, supported by stable non-life insurance earnings, while life profitability is likely to remain pressured and more volatile. For 2021-2022, return on equity is expected to remain strong.

Fitch expects non-life premiums to accelerate growth in 2022 as the economy continues to rebound.

“We believe growth is likely to be driven by health and multi-risk insurance premiums. We expect premium volumes for life insurance to remain volatile, reflecting market sentiment and given that bancassurance is the main distribution channel for life products.

“We expect regulatory capital adequacy levels to remain stable in 2022, supported by stable earnings generation. Solid capital positions provide the sector with additional buffers against unforeseen shocks.”

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