Austrian P&C insurers will maintain strong profitability in 2023

Austrian Property and Casualty (P&C) insurers will maintain their strong profitability with combined ratios on average below 95%, Fitch Ratings says.

P&C premium growth to slow down in 2023, due to slightly lower claims and cost inflation.

The economic uncertainties, combined with strong price increases in 2022, will reduce demand for some insurance products.

The average combined ratio of Austria’s non-life market (including health) improved to about 90% in 2022 from 94% in 2021, despite higher claims inflation, due to significant premium growth and lower catastrophe losses,

Non-life premiums grew by over 8% in 2022, which is significantly higher than 4.5% in 2021.

Growth was driven by price adjustments especially in motor and property businesses due to high inflation in 2022 and high catastrophe claims in 2021 hardening the market.

Fitch expect Austrian life insurers to grow their premium base at a very low rate, because of the increased market volatility that can make unit-linked products less attractive, and high inflation that reduces consumers’ available incomes.

Life premiums declined slightly by about 1% in 2022 after growing by 0.6% in 2021; Fitch expect low premium growth in 2023-2024.

by Yana Keller