OREANDA-NEWS. Fitch Ratings views operational efficiency as the main strategic aim for Dutch insurers. This reflects limited growth prospects and the importance of competitive pricing and customer service in a saturated market. We estimate that the industry aims to cut annual costs by at least EUR500m over 2016-2018 following a reduction of more than EUR650m over 2012-2015.

Dutch life insurers are selling more unit-linked and asset management products in preference to products with investment guarantees, influenced by low interest rates and Solvency II capital requirements.

The introduction of general pension funds (Algemeen Pensioenfonds) creates an opportunity for insurers to offer cost-effective pension arrangements for small businesses. However, we expect profit margins for insurers to be low.

Dutch health insurers are under pressure from the Ministry of Health to limit premium rates - in effect, transferring capital from the health sector to customers through lower premiums. Insurers with lower capitalisation may be less able to limit premium rates, which could lead to a loss of market share.