Moody's – Belgian life and non-life insurers face differing outlooks in wake of pandemic – Yahoo Finance

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Research Announcement:

Moody’s – Belgian life and non-life insurers

face differing outlooks in wake of pandemic

Paris, February 10, 2022 —

» Inflation and rise in claim frequencies are set to increase underwriting costs for property and

casualty insurers, especially in the motor and fire segments

» The outlook for the Belgian life insurance sector is stable as continued unit-linked growth and low

coronavirus-related mortality claims offset still low interest rates

The outlook is negative for the Belgian property and casualty (P&C) insurance sector and stable for

the Belgian life insurance sector, Moody’s Investors Service said today.
“P&C insurers face margin pressure due to rising claims and limited ability to increase prices in a

mature and competitive market,” said Louis Nonchez, Assistant Vice President-Analyst at Moody’s.
Heavy flooding in the Walloon region triggered large payouts from P&C insurers in 2021, and

Moody’s expects further challenges for the sector in 2022. Exceptionally low motor claims

frequencies will likely increase as pandemic-related restrictions are lifted, while strong competition

in the sector will limit insurers’ pricing power. Rising inflation is likely to contribute to higher claims

costs, especially in the motor and fire segments, where the cost of maintenance and repair is

increasing.
Meanwhile, the life sector will benefit from continued unit-linked growth and low coronavirus-related

mortality claims. “A good asset/liability management also helps Belgian insurers to contain the

negative impact of still low interest rates,” said Nonchez.
For Belgian life insurers, unit-linked products (“Branche 23”) account for a growing share of the

market, albeit slightly less than in other European countries. The favourable tax treatment of savings

contracts also supports sales.
The pandemic had a moderate impact on Belgian insurers, with mortality claims remaining

manageable for life insurers, and P&C players largely avoiding a spike in business interruption

Story continues

claims. Belgian insurers maintained sound solvency levels throughout the pandemic. Their balance

sheets remain solid, underpinned by good asset quality.
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http://www.moodys.com/researchdocumentcontentpage.aspx?

docid=PBC_1317400

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Louis Nonchez

AVP-Analyst

Financial Institutions Group

Moody’s France SAS

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Client Service: 44 20 7772 5454
Antonello Aquino

Associate Managing Director

Financial Institutions Group

Moody’s Investors Service Ltd.

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Client Service: 44 20 7772 5454
Lila Sumino, CFA

Associate Analyst

Ratings & Research Support

Moody’s France SAS

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Benjamin Serra

Senior Vice President

Financial Institutions Group

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