Zurich Financial Services AG, Baloise Holding AG and other Swiss insurers will compensate for slowing growth in their home market by making acquisitions, according to Fitch Ratings.
Low interest rates and slowing economic growth are depressing earnings in a Swiss insurance market that is already “highly saturated,” Fitch said in a study published today. The Swiss insurance industry’s total profit was 8.5 billion Swiss francs ($10.7 billion) in 2010, the ratings company said.
We expect “strongly capitalized insurance companies to continue to take advantage of the current challenging market conditions and make acquisitions if attractive opportunities arise,” Fitch said.
Zurich Financial, Switzerland’s biggest insurer, bought 51 percent of Banco Santander SA’s Latin America insurance business for $2.1 billion in February. Third-ranked Baloise completed its 75 million-euro ($109 million) acquisition of Avero Schadeverzekering Benelux NV from Eureko Group in January.