Analysts at S&P Global Ratings note in a new report that EMEA insurers are facing a “perfect storm” of capital market volatility, recessionary risks and heightened inflation, even as rising interest rates support investment income.
But Credit Analyst Volker Kudszus notes that these risks are not expected to “fundamentally question business positions in 2023,” due to strong operating performances in this sector.
That said, S&P continues to maintain a negative view of the EMEA reinsurance subsector, as premium rate increases might match inflation but be insufficient to strengthen profitability.
