OREANDA-NEWS. Fitch Ratings says the sector outlook for the Dutch life insurance market remains negative following the prolonged contraction of the individual life market and insurers' exposure to interest-rate risk.

The sector outlook for the Dutch non-life market is stable despite signs of deterioration of claims experience, and the market is likely to remain profitable in 2016.

Fitch expects low bond yields to be the major negative rating factor for Dutch life insurers, as they are likely to depress profitability for an extended period. A sustained trend of rising rates could lead to a revision of the life sector outlook to stable.

The Dutch regulator has indicated that it will make almost no use of transitional measures that enable insurers to smooth the increase in capital requirements brought about by Solvency II. Fitch views this approach as conservative and regulatory oversight in the Dutch market as strong.