’Vulnerability to financial market volatility has a greater potential to impact the market and is a real concern,’ says head
Financial market volatility is set to be a major concern for UK and European insurers in the year ahead, Sabine Bauer, head of European insurance rating at Fitch Ratings, has said.
Speaking at the opening of the Fitch Ratings Insurance Insights event in London last week (23 January 2025), Bauer said the company had highlighted a number of issues for insurers in the months to come.
“Vulnerability to financial market volatility has a greater potential to impact the market and is a real concern,” she said.
”It carries a risk of impacting balance sheets and it is something we know our clients have identified.”
Amid challenging conditions, Graham Coutts, EMEA senior director of insurance at Fitch Ratings, said insurers must maintain their disciplined approach to underwriting.
“The environment still [has] challenges and underwriting discipline will be of paramount importance in the coming year,” he said.
Climate risks
Meanwhile, Bauer also highlighted that there were issues with a potential reliance on reinsurance capacity for climate risks.
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There have been growing concern among insurers over the ability to underwrite such risks at a time when major reinsurers have been reassessing their capacity commitment to natural catastrophe exposed business.
“It is a big topic as we see questions around climate change losses and whether the ability to cover those risks will be continued,” said Bauer.
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