Be Prepared: How Spanish Insurers Are Positioned for Growth in 2024
Insurance OrganizationsSummary
DBRS Morningstar published its 2024 outlook for the Spanish insurance industry. The commentary discusses the solvency and profitability prospects of the industry, as well as the potential challenges resulting from the continued weakness of the motor insurance segment, which is experiencing combined ratios above 100%.
Key highlights include the following:
-- We expect the size of the Spanish insurance industry to maintain its upward trajectory and exceed EUR 80 billion in gross premiums by 2028.
-- Despite some challenges in the motor insurance business, we anticipate the industry’s profitability will continue to benefit from the relatively higher interest rate environment.
-- Spanish insurers remain well capitalised, with an overall industry solvency capital requirement coverage ratio of 234% at the end of H1 2023, which we anticipate will remain above that level in 2024.
“The return on equity of the Spanish insurance industry exceeded the 10.00% mark in the past decade, except in 2015, when it was 8.82%”, said Marcos Alvarez, Global Head of Insurance. “We anticipate that Spanish insurers’ profitability will improve in the short term despite some weakness in the motor insurance business, which continues to suffer the impact of above-average increases in the cost of parts”.