Swiss domiciled property and casualty (P/C) insurers continue to show underwriting discipline and cost efficiency, which in turn is driving solid performance with 2017 results showing continued strength, reports S&P Global Ratings.
In an effort to increase their resilience to a challenging operating environment underlined by minimal organic growth opportunities, low interest rates and a strict solvency regime, Swiss insurance companies have, in recent times, looked to transform their business models.
S&P rates six Switzerland-based primary insurers, including AXA, Allianz, Baloise, Helvetia, Swiss Life, and Zurich, which, the ratings agency says delivered strong results in 2017, as key credit metrics either met, or exceeded its expectations.
“We believe the solid performance, in particular for the P/C segment, stems from the insurers’ commitment to underwriting discipline and cost efficiency,” said S&P analyst, Silke Longoni.
“For their part, life insurers benefitted from further back book management such as portfolio shifting from traditional to capital-light products, and cost reduction, supported by fee income from unit-linked business and asset management business,” continued Longoni.
According to S&P, the firms it rates are well positioned to manage low interest rates, and the ratings agency expects companies to further shift their portfolios towards capital-light solutions, continue to improve the profitability and capitalisation of the life segments, while complying with the region’s stringent regulatory framework.
The Swiss P/C sector boasts some of the lowest combined ratios in Europe, and contributes solid profit to the country’s overall insurance industry, says S&P.
