RPT-Fitch: Italian Non-life Profitability to Decline in 2014
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April 22 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings expects Italian non-life underwriting results to deteriorate in 2014, with claims frequency increasing and premium rates continuing to fall. Life sales are volatile, but should achieve single-digit growth.
Fitch believes that the eurozone debt crisis remains a threat to Italian life insurers' creditworthiness despite the crisis having shown signs of tangible improvement in 2012 and 2013. Italian life insurers are significantly exposed to Italian government and corporate debt. Fitch currently rates Italy 'BBB+', with a Negative Outlook.
Fitch expects Italian insurers' non-life premium income to remain under pressure in 2014 due to declining rates in the dominant motor market and stiff competition in commercial lines. As a result, prospects for growth remain subdued.
Fitch expects life sales to continue to grow in 2014, albeit at a slower pace than in 2013. Life profitability is much harder to predict, given the volatility in the Italian bond market, as some of the fluctuation in the prices of bonds on insurers' balance sheets feeds directly into their reported profit.
The 'Italian Insurance Market Dashboard' is available at www.fitchratings.com or by clicking on the link below.
Link to Fitch Ratings' Report: Italian Insurance Dashboard FY13
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