Interest rates entered a downward spiral following Mario Draghi’s ‘whatever it takes’ pledge to save the eurozone in July 2012. As a result, life insurers were left sitting on top of a precarious mountain of non-realised gains. In Belgium and France, firms also faced exposure to massive lapse risk, should rates abruptly rise.
This position pushed some insurers to rashly sell off bond holdings as well as buy expensive upside protections. Société Général Corporate and Investment Banking (SGCIB) ap