Thursday, May 24, 2018

Global non-life investment income set to decline

The investment income of global non-life insurance companies will likely decline by around US$5 billion to US$15 billion this year, according to Moody’s.

In a recent report for its clients, the ratings agency stated that low global interest rates will continue to pressure profitability and potentially the solvency of insurance companies.

The new Moody’s research also suggests that German and Norwegian insurers are at highest risk from the low global interest rate climate.

The decline in global non-life insurers’ investment income will directly reduce the industry’s net result by 5% to 10%, the agency added.

Benjamin Serra, senior credit officer at Moody’s, was quoted as saying that the investment income of the global life insurance industry is expected to decline by US$20bn to US$40bn this year, but the impact on life insurers’ profits will be more limited.

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