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AM Best states that market conditions for UK non-life insurers have been difficult in 2019. Against a backdrop of strong competition, companies have had to contend with changes in the discount rate used to calculate lump-sum personal injury compensation, claims inflation due to higher repair costs and challenging investment market conditions driven by political and economic uncertainty. On a positive note, motor insurers have broadly welcomed the changes to the UK’s personal injury compensation system set out in the Civil Liability Act, with key measures expected to come into force during 2020.
In its new report, “UK Non-Life Insurers Face Strong Competition and Claims Inflation”, AM Best notes that while the uncertainty associated with Brexit continues to weigh on the UK economy, from an operational point of view, AM Best rated UK-domiciled insurers are generally well prepared and those that plan to continue to underwrite European Economic Area business have put in place arrangements to ensure that they are able to do so following a loss of passporting rights. AM Best also points out that for the retail non-life sector, a loss of passporting rights is not a significant issue as most insurers underwrite principally domestic business.
A full complimentary copy of this report is available via the following link: