The credit quality of most insurers in the Asia-Pacific region will remain stable until next year despite periodic disasters and other industry risks, Standard and Poor's (S&P) said yesterday.
"This prognosis is predicated largely on the strengthened balance sheet of the insurance industry in recent years although there are challenges ahead for life and non-life insurance players in the region," analyst Paul Clarkson said in a press statement.
The Philippines, however, received a "negative" outlook in both the life and non-life sectors from the global credit watchdog, which monitors nearly 250 of the leading insurance players in the region.
China received a "developing" outlook in both sectors, which suggests it could either improve or deteriorate in a few years.
In a report, S&P stressed the importance of favorable investment markets, sensible regulatory reform, level of competition versus consolidation, and appropriate pricing and reserving in determining the outlook of specific firms from now until next year.
WIDE VARIATIONS
It noted wide variations in the industry, from "totally open" markets like Singapore and Hong Kong to tightly regulated Taiwan and China, and said ratings of Asian players ranged from the highest possible "AAA" to the very weak "CCC."
"[In] some of the markets, in particular New Zealand and Malaysia, non-life are strong performers and generate relatively stable profits. Others, including Taiwan, the Philippines and Japan, are volatile, catastrophe-prone, or beleaguered by negative spreads and soft pricing," S&P said.
CONSOLIDATION
It said many of the insurance markets tend to feature "a leading group of companies of sound financial strength" below which there is "a rapid deterioration in strength" among smaller players.
Consolidation can help weed out the weaker players and enhance financial stability, as shown in Japan and Australia.
"However, for many Asian countries, there is an over-abundance of insurance underwriters, leaving a significant number of smaller non-viable riskier companies. With a high degree of private ownership in many Asian countries, consolidation could take several years," it said.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS