KUALA LUMPUR, Nov 6 -- AM Best via its new report has maintained a stable market segment outlook on South Korea’s non-life insurance market.
The outlook is maintained although the increasing losses and intense competition in the automobile and long-term insurance lines, as well as rising interest obligations, may pressure the sector’s overall profitability.
The Best’s Market Segment Report, titled ‘Market Segment Outlook: South Korea Non-Life Insurance’, states that supporting the stable outlook are broadly stable market dynamics, despite slowing growth and declining underwriting profitability.
The potential for relief on underwriting pressure should the automobile pricing cycle harden and competition in the long-term insurance line cool, as well as an overall positive bottom line supported by a continuous stream of net investment profits, are also factors in the outlook.
Declining sales of long-term savings type products, as well as stagnant economic growth and direct and indirect regulatory restrictions on insurance pricing, have pressured the industry’s top line.
South Korean non-life insurers, like their life counterparts, are highly dependent on investment yield from their substantial volume of long-term savings premiums as a main income source.
AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry. More details at www.ambest.com
-- BERNAMA
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