S&P: Irish Non-Life Market-‘Testing in 2009’, But ‘Fundamentally Robust’

February 5, 2009

In a report entitled “A Testing 2009 For The Irish Non-Life Insurance Market, Despite Fundamental Strengths,” Standard & Poor’s Ratings Services forecast a “difficult year ahead for the Irish non-life insurance market as a result of rising claims and continuing intense competition, which is limiting rate increases.”

S&P said this situation, “combined with anticipated lower investment returns, is expected to hinder profitability. Nevertheless, the market maintains fundamental strengths, benefiting from supportive legislative structures, a well-organized and competitive business environment, and a highly rated sovereign (Republic of Ireland; AAA/Negative/A-1+).”

Credit analyst Neil Gosrani added: “We consider the outlook for the industry as challenging as a result of the downturn in the economic environment combined with the end of a golden era of underwriting profitability, which has existed for much of this decade.”

S&P described the Irish insurance market as “mature,” adding that where the “subsidiaries of international insurers and indigenous players operate in a highly competitive environment, opportunities for growth are viewed as limited.

“We therefore expect companies to place greater emphasis on increasingly technical underwriting, a focus on risk management, and greater operational efficiencies. The benefits of these changes may be eroded, however, if the market once again demonstrates some of the extreme behaviors exhibited during the long soft market.”

The report is available to RatingsDirect subscribers at: www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to: research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor’s public Web site at: www.standardandpoors.com.

Source: Standard & Poor’s

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