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The credit rating outlook for Canada’s insurers looks stable heading into 2020, Moody’s Investors Service says.

In a new report, the rating agency said that a still-healthy economy should support earnings growth at Canadian life insurers, and premium growth for property and casualty (P&C) firms.

This, in turn, underpins its stable rating outlook for both segments of the insurance industry, despite the ongoing drag of low interest rates on the insurers’ profitability and investment performance.

“Low long-term rates are also having the dual effect of forcing Canadian life insurers to reinvest maturing assets at lower yields, weighing on their investment income, and of increasing the prospect for seeking higher-yielding, and higher risk assets,” said David Beattie, senior vice president at Moody’s.

Moody’s noted that solid asset quality also remains a driver of the stable outlook for Canada’s life insurers.

Additionally, it said that the insurers have the capacity to invest in technology to guard against competitive disruption.

“The investment in digitalization should enhance client interface and drive opportunities for life insurers and P&C insurers to benefit from claims efficiencies and risk segmentation,” it said.