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Moody’s expects stable outlook for UK life and P&C insurers
The agency cited stronger 2026 earnings for P&C insurers, but said recent declines in insurance prices should weigh on underwriting margins in 2027.
Moody’s Ratings expects the outlook for the UK’s life and property and casualty (P&C) insurance sectors to remain stable, supported by revenue sources such as higher investment yields, growing pension savings, and steady demand for compulsory insurance, according to the agency.
Moody’s warned that economic uncertainty, weaker insurance pricing, and rising claims costs are expected to pressure profitability.
For P&C insurers, the agency said results at the start of 2026 have been relatively strong, helped by reserve releases, favourable weather conditions, and reduced reinsurance costs, it added that the decline in insurance prices seen recently is expected to weigh more heavily on underwriting margins during 2027.
On the life side, Moody’s said insurers should benefit from continued expansion in workplace pensions and sustained demand from pension schemes looking to transfer risk. It also noted that competition in the bulk purchase annuity (BPA) market is intensifying, with new providers and more capacity leading to narrower margins.