A new report from Standard & Poor’s Ratings Services notes that “from October 2006 to August 2007, the Australian non-life [P/C] insurance industry underwent a deluge of activity that is changing the industry landscape permanently.”
The report entitled, “Australian Non-Life Insurance: Tempestuous Waters But Wind Still In Sails,” documents some of the events impacting the industry in the period, “including major consolidation in the domestic market, ambitious expansion drives into international markets, regulatory developments, and some extreme weather-related events that will dampen the upcoming reporting season,” said the announcement.
It also details some of the trends and risks to the stability of the industry from a S&P’s perspective. “Despite the rough patches, profitability for the industry as a whole remains strong for the period,” stated S&P analyst Thomas Cherian. “The industry is, however, experiencing margin compression due to competition, especially in commercial lines.”
S&P also indicated that it currently rates more than 80 percent of Australian non-life insurers as ‘A+’ or higher and 95 percent are on stable or positive outlook. S&P also expects the industry’s outlook to remain stable in the near term.
Additional details for each of the insurers rated by Standard & Poor’s are summarized in the report card.
A copy of the published report is available on RatingsDirect, Standard & Poor’s Web-based credit analysis system, at: www.ratingsdirect.com.
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