OREANDA-NEWS. Fitch Ratings says in a new report that operating conditions within the UK non-life company market are expected to remain stable in 2016.

Fitch expects the current direction of motor premiums to change, with recent rises stalling, as the consequences of the UK government's autumn statement are realised. A new set of measures by UK government to tackle the exaggerated costs of minor bodily injury claims was announced in November 2015. Fitch expects these measures will eventually lead to lower claims costs for insurers but expects motor insurers to respond cautiously until they see the evidence of reduced claims costs. Following three years of decline, further reductions in household rates are expected to be smaller, as insurers become more sensitive to lower profit margins. Low interest rates will continue to suppress investment income - the main contributor to insurers' earnings.

Nevertheless, Fitch maintains a Stable Rating Outlook on its rated UK non-life insurers, as the company market's strong capital adequacy and stabilising earnings offset pressures from low investment income and limited growth opportunities.