European Insurers Fairly Stable, Competitive, and Profitable Overall

A.M. Best reported that the primary focus of Europe's largest nonlife insurers continues to be on their local markets, with most focused on the retail segments and, in particular, the personal lines business. Most European countries have relatively stable nonlife insurance segments, which, although competitive, are technically profitable for the market overall. Although some European countries are currently experiencing a level of economic and political instability, insurers have strategies in place for managing this environment.

This stability, according to A.M. Best, is mirrored in its ranking of the largest 30 nonlife insurers, with no new entrants into the ranking and no movements in the positions of the top five players, as Allianz remained in the number one spot, followed by Lloyd's, AXA, Chubb, and Zurich Insurance Group. Lower down the ranking, most entities have moved up or down by only one position.

Mathilde Jakobsen, director of analytics, said, "The gross premiums written of the five largest insurers in this ranking have been largely stable at just under 50 percent. When we look at the largest 10, we note that the proportion of premiums accounted for by them is also unchanged at 70 percent. Despite this concentration, most European insurance segments are experiencing a relatively strong level of competition. Furthermore, each market has its own idiosyncrasies, with product and distribution channel mix dictated by the history and culture of each particular country, with some of the groups underwriting the majority of their insurance portfolios in their country of domicile."

The report also looked at the regulatory solvency positions of the largest 30 European nonlife insurers for 2018 and 2017. Angela Yeo, senior director of analytics and head of operations—analytics, added, "Of the groups for which Solvency II ratios are available, only a handful have ratios below 170 percent, and more than half have ratios above 200 percent, illustrating the strong solvency position of the European insurance sector. The highest ratios tend to be held by mutual groups, which do not have to consider return on equity for shareholders, and by those underwriting reinsurance and large corporate risks, where strong solvency is a competitive advantage."

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