The real estate / accident insurance sector is still well-capitalized but will see interest rate hikes slower in 2022, Fitch Ratings Inc. said on Tuesday.
Interest rate increases have averaged 10% over the past seven quarters until the end of the third quarter of 2021, increasing by 8.9%.  The increases were most pronounced in underperforming segments, including commercial real estate, cars and areas of responsibility. Fitch expects that "the extent of interest rate hikes is expected to decrease, but remain positive until 2022." % 2022.
Low interest rates continued to limit growth, "but positive investment gains from stock market appreciation increased net profit further and moved policyholders' surpluses in the industry to another record level", at the end of the third quarter.
The capital position of the real estate and damages industry has improved over the past two years and policyholders' surpluses have increased by over 30% since the end of 201
"" The capital strength of the industry and individual insurance companies provides support against major loss events or a combination of negative opportunities that may result from disasters, economic turbulence and investment market turmoil, a d negative experience, "said Fitch.
The rating agency said it believes that" a broader negative change in industry outlook and business values would most likely require a confluence of major adverse events, such as disasters, investment losses, pricing errors, reserve deficits or other pandemics that reduce capital levels in a short period of time. "