Rising interest rates expose continental insurers to lapse risk

Rising interest rates expose continental insurers to lapse risk

time-money

A lack of penalties for lapsing contracts in some European markets leaves some continental insurers dangerously exposed to the Argentinean scenario of a sudden rise in short-term interest rates, with potential net losses of up to 21% of shareholder equity in the most extreme scenarios, according to rating agency Moody's.

A report by Moody's Investor Service, Interest Rate Risk for Life Insurers, says a sudden rise in short-term interest rates as experienced in Argentina earlier in the decade

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: