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Feb 4 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings says in a new report that South African non-life insurers’ 2013 underwriting profits will be negatively affected by significant claims related to natural catastrophe events. However, earnings have strongly benefited from rising equity markets, partially offsetting the subdued underwriting performance.
Underwriting margins continue to be pressured by the high level of competition in the South African non-life insurance market. Financial strain on consumers and the overall difficult economic environment also make it difficult for insurers to achieve appropriate premiums for the risks underwritten.
The solvency positions of South African non-life insurers continued to be resilient in 2013. Most companies maintain a significant buffer over the regulatory minimum capital requirement. As part of the new interim measures ahead of the Solvency Assessment Management implementation, non-life insurers will be required to change to a risk-based approach to calculating capital requirements. It is not yet clear to what extent this will affect solvency margins.
The special report “South African Non-Life Insurance” is available at www.fitchratings.com or by clicking on the link below.
Link to Fitch Ratings’ Report: South African Non-Life Insurance: Catastrophe Claims and Competition Squeeze Margins