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Subject: Economic News/Analysis

AM Best Maintains Stable Outlook on UK Life Insurance Segment

AM Best is maintaining its market segment outlook on the U.K. life insurance segment at stable.

In its new Best's Market Segment Report, "Market Segment Outlook: United Kingdom Life Insurance," AM Best cites a number of factors supporting its stable outlook, including a strong pipeline for pension risk transfers and sufficient capitalisation to fund projected medium-term expansion (with expected prudential regulatory changes that should broaden investment opportunities). At the same time, rising interest rates have reduced the need for illiquid assets to support investment earnings.

Factors that moderate AM Best's stable outlook include unrealised losses driven by rising rates eroding shareholders' funds, though strong asset liability management in place should limit the risk of having to crystallise losses. AM Best also notes that the implementation of IFRS 17 might prove an operational burden for management as it may require some effort to educate stakeholders.

To access a complimentary copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=330567.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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