Rising interest rates positive for U.S. life insurers
July 18, 2013 by Warren S. Hersch
The recent rise in interest rates is credit-positive for U.S. insurers, Moody’s Investors Service concludes in a new report.
In a July 15 “Special Comment,” the New York-based credit rating agency cites an 85 basis-point rise in the yield of 10-year U.S. Treasury bonds—to about 2.6 percent on July 11 from less than two percent in late April—as “positive” for U.S. life insurers.
“If this trend continues for a few quarters, combined with an improving economy, a revised sector outlook to stable from negative may be warranted,” the report states.