MOODY’S MAINTAINS NEGATIVE OUTLOOK ON EUROPEAN INSURER RATINGS

Moody’s Investors Service has maintained its negative outlook on the European insurance industry, but warns the coronavirus outbreak exacerbates pressure on insurers’ solvency and profitability. According to the rating agency, volatility in financial markets has reduced solvency levels by 20 percentage points on average. Interest rates will stay lower for longer, weighing on the solvency and profits of property/casualty insurers while delayed premiums payments and slower economic activity will reduce inflows for insurers in the short term, particularly those with a mainly corporate customer base, Moody's said. Cornavirus-related non-life claims are expected to remain “manageable”, although insurers face the risk that governments will “exert pressure to make ex gratia payments” or to make some other form of “financial contribution” to the resolution of the crisis, it added.