IMF says Europe’s life insurers facing crisisApril 20 2015 by InsuranceAsia News Staff
The International Monetary Fund (IMF) has said that the European life insurance industry is in danger due to the long period of low interest rates.
The IMF said the life insurance industry, in particular, was suffering severely from low interest rates, a situation that could result in in the failure of some insurers.
A quarter of the insurance companies in Europe would be unable to maintain the required solvency standards, if interest rates remained low, the IMF said in its semi-annual assessment of global financial risks.
At present the 28-nation European Union’s life insurance industry is worth some USD4.7tr in assets but the IMF warned that the failure of one or more midsize insurers could cause an industry-wide loss of confidence.
The IMF urged the authorities to immediately tackle the challenges facing life insurers in Europe and suggested prompt regulatory and supervisory actions to prevent the high and rising threat to insurers’ solvency.
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