Aug 14 (The following statement was released by the rating agency)
Fitch Ratings says in a new report that the UK life
insurance sector has reported a strong set of H113 results despite the sluggish
economy. Fitch's rating outlook for the sector remains stable, indicating that
the majority of UK life insurer ratings are likely to be affirmed over the next
"Underlying profits and cash generation are continuing to improve," says David
Prowse, Senior Director in Fitch's Insurance team. "This is no accident and it
is not simply a side-effect of recovering financial markets. It is the direct
result of stronger management discipline in three vital areas where some
insurers had previously lost focus cost control, product mix and pricing."
While CEOs continued to emphasise cash generation as the priority in their H113
results presentations, several also highlighted growth opportunities in emerging
markets. In the long term, growth can be ratings-positive if it increases and
diversifies earnings; in the short term, it can be ratings-negative if it puts
too much strain on capital and cash.
The annuity market is shifting apace towards medically underwritten annuities
(enhanced annuities) as customers become aware that they can shop around for a
larger annuity based on their lifestyle or certain medical conditions. The likes
of Aviva and Legal & General are now competing strongly with specialist
providers such as Just Retirement and Partnership. Legal & General's enhanced
annuity sales more than doubled in H113.
Fitch is holding a teleconference to discuss the UK life sector, on Wednesday 21
August at 14:30 UK time. Fitch's analysts will highlight the main points of
Fitch's publication and give some additional insights into the UK life market.
There will be time for participants to ask questions.
The comment "UK Life Insurers Upbeat; Ratings Outlook Stable" is available at
www.fitchratings.com or by clicking the link below.
Link to Fitch Ratings' Report: UK Life Insurers Upbeat; Ratings Outlook Stable
Participants can email any questions in advance of the teleconference call to
Date: Wednesday 21 August
Time: 14:30 UK time
Participants must register for the call in advance using the below link:
A replay of the call will also be available on the agency's public website,
www.fitchratings.com, under Events > Past Events.