UK life insurance segment fundamentals remain strong

Written by Adam Cadle

21/09/2022

UK life insurers’ fundamentals were strong in H1 2022, despite high inflation and capital market volatility, Fitch Ratings has said in a new report.

Insurers’ underlying performance was resilient and new business growth strong, whilst the Solvency II (SII) capital position benefited from rising interest rates.

Most UK life insurers reported an increase in SII ratios in H1 2022, as capital generation from in-force business and rising interest rates more than offset the impact of wider credit spreads and negative equity markets.

UK life insurers also reported a general rise in bulk annuity new business volumes in the semester, following a disruption to volume activity in H1 2021. Fitch said it expects demand for pension risk transfer from corporates to remain strong, with further growth anticipated in H2 2022.

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