Fitch Ratings has maintained the French non-life insurance sector's outlook at stable, indicating that a majority of French non-life insurer ratings are likely to be affirmed over the next 12-24 months. Pricing conditions and claims experience have continued showing signs of improvement, as French non-life insurers experienced recovery in their technical results in 2011-2012.
Volume growth continued to be weak in 2011-2012, however. Further, the difficult economic environment has led to the emergence of low-cost offers that are more attractive to policyholders looking for less expensive and simpler insurance products.
Fitch considers the main risks to French non-life insurers' ratings in the next 12-24 months to be a return of aggressive pricing policies, which would have a negative effect on the sector's profitability, and a prolonged period of low financial returns. Should these trends materialise, this could exert negative pressure on French non-life insurers' ratings and prompt a revision of the rating outlook to negative.
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