Moody's – Belgian life and non-life insurers face differing outlooks in wake of pandemic – Yahoo Finance
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Research Announcement:
Moody’s – Belgian life and non-life insurers
face differing outlooks in wake of pandemic
Paris, February 10, 2022 —
» Inflation and rise in claim frequencies are set to increase underwriting costs for property and
casualty insurers, especially in the motor and fire segments
» The outlook for the Belgian life insurance sector is stable as continued unit-linked growth and low
coronavirus-related mortality claims offset still low interest rates
The outlook is negative for the Belgian property and casualty (P&C) insurance sector and stable for
the Belgian life insurance sector, Moody’s Investors Service said today.
“P&C insurers face margin pressure due to rising claims and limited ability to increase prices in a
mature and competitive market,” said Louis Nonchez, Assistant Vice President-Analyst at Moody’s.
Heavy flooding in the Walloon region triggered large payouts from P&C insurers in 2021, and
Moody’s expects further challenges for the sector in 2022. Exceptionally low motor claims
frequencies will likely increase as pandemic-related restrictions are lifted, while strong competition
in the sector will limit insurers’ pricing power. Rising inflation is likely to contribute to higher claims
costs, especially in the motor and fire segments, where the cost of maintenance and repair is
increasing.
Meanwhile, the life sector will benefit from continued unit-linked growth and low coronavirus-related
mortality claims. “A good asset/liability management also helps Belgian insurers to contain the
negative impact of still low interest rates,” said Nonchez.
For Belgian life insurers, unit-linked products (“Branche 23”) account for a growing share of the
market, albeit slightly less than in other European countries. The favourable tax treatment of savings
contracts also supports sales.
The pandemic had a moderate impact on Belgian insurers, with mortality claims remaining
manageable for life insurers, and P&C players largely avoiding a spike in business interruption
Story continues
claims. Belgian insurers maintained sound solvency levels throughout the pandemic. Their balance
sheets remain solid, underpinned by good asset quality.
Subscribers can access the report at:
http://www.moodys.com/researchdocumentcontentpage.aspx?
docid=PBC_1317400
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Louis Nonchez
AVP-Analyst
Financial Institutions Group
Moody’s France SAS
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Antonello Aquino
Associate Managing Director
Financial Institutions Group
Moody’s Investors Service Ltd.
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Lila Sumino, CFA
Associate Analyst
Ratings & Research Support
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Benjamin Serra
Senior Vice President
Financial Institutions Group
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