Weaker investment revenue to hit Australian insurers' earnings

Written by Adam Cadle

09/11/2020

Australian life and non-life insurers' earnings are likely to fall due to top-line pressure and weaker investment revenue, Fitch Ratings has said in a new report.

"We expect premium growth to be sluggish due to lower economic activity and various customer relief packages rolled out by insurers," it said.

Weak economic conditions are also likely to impede primary non-life insurers' ability to pass on higher reinsurance costs, which have risen due to the recent catastrophe losses. The economic fallout will also add pressure to the ongoing repricing of life insurers' individual disability insurance portfolios.

"Weak investment market returns, driven by record low interest rates and losses from market volatility, will weigh on insurers' overall results," the report stated.

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