Most UK life insurers are sheltered from the sovereign debt crisis in the Eurozone and have consequently reported strong 2011 results, Fitch Ratings has said.
A newly-published comment document found regulatory capital positions have remained strong, ending 2011 at levels close to the pre-crisis levels of end-2007.
This is despite the deepening of the eurozone sovereign crisis and a fall of 6.7% in the FTSE All-Share Index in 2011.
Clara Hughes, senior director in Fitch's Insurance team, said: "In contrast to several European insurance groups, most major UK life insurers have negligible direct exposure to the sovereign debt of Greece, Italy, Ireland, Portugal and Spain.
"Exposures typically amount to less than 5% of shareholders' equity.
"The notable exception is Aviva, which has significant exposure to Italian sovereign debt supporting its sizeable operations in Italy."
The other major theme of the 2011 results season has been industry concern over perceived threats to the UK life insurance industry from the new risk-based regulatory regime, Solvency II.
David Prowse, senior director in Fitch's Insurance team, commented: "Under Solvency II, capital requirements for annuities stand to be more onerous, and although industry lobbying against this is having an impact, it is still not clear how much extra capital annuity providers may need."
Fitch expects Solvency II and the Retail Distribution Review to cause some disruption to the UK life market but expects major insurers to adapt successfully to the new landscape.
Fitch has maintained its stable rating outlook for the sector.
