The Australian non-life insurance sector has a stable outlook despite challenging market conditions and limited investment opportunities, according to Standard & Poor’s (S&P).

The ratings agency says insurers maintained solid earnings and strong capital levels in the past year, but their ability to continue responding to aggressive rate discounting is limited.

“On a more positive note for insurers, recent policy renewals indicate the soft pricing environment… may have peaked in Australia,” it says.

S&P says insurers have recently made price increases while retaining customers.

“This has happened in personal and commercial lines, and certainly in commercial there was a sense that it couldn’t go any lower,” S&P analyst Caroline Strahan told insuranceNEWS.com.au.

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