Global rating agency Standard & Poor's today revised business outlook of India's non-life insurers from stable to negative, as underwriting business is expected to decline. "The negative outlook on India reflects our view that underwriting performances are likely to stay very weak this year despite strong growth potential for premiums," S&P said in its report titled 'Asia-Pacific Nonlife Insurance'.
At present, there are 24 non-life insurance companies in India. Of them, the four government-controlled entities command a market share of about 60 per cent. "We believe underwriting performances (in India) are unlikely to significantly improve in the next 12 months, despite signs that prices are stabilising," S&P said. It said the industry was maintaining its profitability through investment income, and cautioned against likely shocks due to vulnerability in investment market.
S&P conducted comprehensive review of 12 non-life insurance markets-- Australia, China , Hong Kong, India, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand. The review assessed the impact of several catastrophes in the region over the past year among many other factors.
"We revised the outlooks on three markets to negative from stable-- Japan, New Zealand and India," it said.
At present, there are 24 non-life insurance companies in India. Of them, the four government-controlled entities command a market share of about 60 per cent. "We believe underwriting performances (in India) are unlikely to significantly improve in the next 12 months, despite signs that prices are stabilising," S&P said. It said the industry was maintaining its profitability through investment income, and cautioned against likely shocks due to vulnerability in investment market.
S&P conducted comprehensive review of 12 non-life insurance markets-- Australia, China , Hong Kong, India, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand. The review assessed the impact of several catastrophes in the region over the past year among many other factors.
"We revised the outlooks on three markets to negative from stable-- Japan, New Zealand and India," it said.
Severe natural disasters and diverging economic forecasts have affected the growth prospects for several Asia-Pacific non-life insurance markets, the S&P said. "We revised the outlook on Japan and New Zealand's non-life markets to negative from stable because we expect the recent earthquakes there to affect (their)earnings and capital strength," S&P credit analyst Paul Clarkson said. "We took the same action on India's market due to the likelihood of very poor underwriting performances," he added.
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