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Profitability of the sector has shown some positive signs both for life and non-life.
Inflation rate forecast is decreasing inverting the positive trend observed till March 2017, whereas unemployment rates continue to decrease.
Despite some positive developments, the continuing low-yield environment and the observation that market fundamentals might not properly reflect the underlying credit risk, are still important concerns for the European insurance industry.
Recent natural catastrophe events have not yet been reflected in the data, therefore no impact on the industry is shown at this stage.
Market perception, driven by the outperformances of the insurance stocks and the reduction of the Credit Default Swap Spreads, improved. Ratings and rating outlooks remain stable.