In need of reassurance
The knock-on effects of the crisis in equities has hit the insurance sector particularly hard – so much so that UK regulatory body the FSA has been forced to step in and allow certain insurers to breach mimimum solvency ratios. Oliver Holtaway asks how this might affect bondholders
Unless you have recently returned from a long holiday in Antarctica, you will probably have noticed that the insurance sector is going through what analysts might euphemistically term a ‘rough patch’. The turmoil in global stock markets – since 2000, the Dow has fallen 30% and the FTSE is down 51% – has left insurance companies with greatly reduced assets to meet their liabilities.
Equity troubles
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