In the first of a series of explainers on recent developments in the UK motor property & casualty insurance industry, Marius Strydom discusses the meaningful benefits that recent interest rate and yield increases could offer to the sector. While near-term results from Directline Assurance, Admiral Group Plc, Sabre Corporation and Hastings Direct are negatively impacted by unrealised losses on fixed interest portfolios due to rising yields, going forward, earnings could benefit between 15% and 20% while returns could be boosted by between 5% and 7% from higher rates, all things being equal. Next instalments in this series will look at rising inflation, motor premium rate outlook and near-term results expectation in more detail.
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