Central banks across Asia have loosened interest rates this year but the Bank of Korea has been particularly aggressive, lowering rates twice between January and June to a record low of 1.5%, and as a result domestic insurers are increasing their risk appetite to counter the lower yield on their traditional bond portfolios.
The widespread rate cuts, from China to New Zealand, are posing problems for insurers across the region which are trying to meet the return targets on business written when
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