S&P Reports on Danish P/C Sector

July 6, 2006

A new report from Standard & Poor’s Ratings Services – “Non-Life Insurance Industry Risk Analysis: Denmark {Kingdom of}” – concludes that economic and industry risk are moderately low in the Danish non-life insurance market.

“Sustained earnings growth and improved capitalization combine with a strong and stable economy and low inflation,” stated S&P credit analyst Thorbjørn Børs.

The report notes: “Credit fundamentals are generally positive, with improvements in risk management, a greater focus on delivering attractive shareholders’ returns, and the structure of the Danish non-life market suggesting that the pricing cycle should not be so pronounced in the future.”

However, S&P also indicated: “The Danish non-life market, which is the second largest in the Nordic region and the 13th largest in Europe, does remain vulnerable to a downward shift of the underwriting cycle. Uncertainties also exist in long-term lines, such as workers’ compensation, regarding the technical level of pricing caused by legislative changes.”

“We expect ratings on Danish non-life insurers to be broadly unchanged over the next two years, ” Børs continued. “Nevertheless, any momentum in this period is likely to be upward.”

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