Readiness of the Spanish insurance sector in a shifting economic and financial environment
Fecha: julio 2022
Daniel Manzano and Aitor Milner
Insurance sector
SEFO, Spanish and International Economic & Financial Outlook, V. 11 N.º 4 (July 2022)
The bottlenecks caused by the pandemic and the war in Ukraine are sending prices soaring and leading to inflationary pressures not seen in decades. Major central banks have announced sharp and sustained rate hikes, while clouds have gathered over forecasts for economic growth. Spain’s insurance sector has traditionally proven highly resilient and capable of adapting to shifting market environments. The changes taking hold will impact the sector’s investment portfolios and trigger a business response mainly in life insurance and traditional savings products, which have suffered from under-development in recent years due to a period of protracted low interest rates. The anticipated economic slowdown could also negatively impact demand for certain non-life products. Finally, inflation is expected to increase the costs of claims as not all segments can pass on rising costs to client premiums.