The outlook for insurance companies, including insurance brokers, healthcare companies and warranty and claims administrators, is stable, Standard & Poor & # 39 ;s Global Ratings said in a report on Thursday.
The sector should benefit from rising insurance prices, which can be moderated until 2021 and are likely to continue mergers and acquisitions, the report said.
"We now expect that most brokers we judge will close the year on a flat to some positive organic growth – light for a normal year but a profit for 2020, in our opinion," said S&P
Companies in the group proved to be resilient in 2020.
"Although the trends varied by subsector, insurance companies have shown overall resilience among the pandemic and the global economic downturn," says S&P. "We believe that all sub-sectors will show growth and profitability in 2021
Brokers should continue to benefit from rising insurance rates and prices, says S&P. "We expect continued price growth, albeit at a slower pace in 2021."
Mergers and acquisitions are expected to remain robust.
"The seemingly endless broker M & A frenzy boils down to supply and demand that is likely to persist," the report says.
Capital is still plentiful, with easy access to cheap credit, the report says.