Life insurers facing unrealized losses due to pace of interest rate rises: Moody’s

March 21, 2023 by Jack Willard

A report from Moody’s Investors Service has suggested that while the increase in interest rates within the last year has been positive for life insurers in Europe, the fast pace of the increase means that a majority of insurers are now sitting on significant unrealized losses in their fixed income portfolios.

In the report, Moody’s states that it does not expect these losses to be realized, because insurers have a relatively illiquid liability profile, and practice sound asset liability management (ALM), therefore they are generally able to hold their investments to maturity, by which time losses will have likely been reversed.

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Originally Posted at Reinsurance News on March 20, 2023 by Jack Willard.