Fitch: European insurance sector outlook remains neutral

By Michael Jones

June 23 - (The Insurer) - The outlook for the European insurance sector remains neutral at mid-year 2025 due to stable business conditions, despite a weaker economic outlook and heightened financial market volatility, Fitch Ratings said last week.

Individual country outlooks for non-life insurance in Europe were all neutral aside from German non-life, which Fitch classed as improving.

Fitch said the pricing cycle has peaked in most countries but is expected to remain adequate for the rest of 2025.

Weaker economic growth may constrain revenues but could also reduce claims frequency, the rating agency added.

European insurers may face a pick-up in claims inflation because of the tariffs implemented by U.S. President Donald Trump and related supply chain disruptions, particularly for construction materials and motor spare parts.

Fitch said European insurers have low to moderate exposure to potential weaknesses in the U.S. economy, dollar and operating conditions. The most directly exposed are Europe-based global (re)insurers and London market insurers.