AM Best maintains London market’s stable outlook

Rating agency AM Best has maintained its outlook for the London market insurance segment at stable.

In its new Best’s Market Segment Report, “Market Segment Outlook: London Market Insurance,” AM Best notes the strong pricing environment that is expected to support further improvement in underlying underwriting profitability.

Other positive factors include higher interest rates that are likely to boost investment yields, the improved access for third-party capital to support growth opportunities, and market modernisation initiatives that should reduce costs.

Moderating factors include the increased reserve risk posed by social and economic inflation, exposure management challenges as a result of changing climate trends and systemic risks, potential threats from volatile economic conditions, and high reinsurance costs impacting business strategies of those with elevated levels of reinsurance use. In addition, uncertainty remains with regards to the ultimate cost of claims related to the conflict in Ukraine.