Businesses across the board have been drastically impacted by the effects of COVID-19 and insurance was not immune. The prevailing low interest rate environment is perhaps this industry’s most relevant current capital and liquidity concern. This has been a global trend in the last decade, and treasury rates in much of the developed world are at, or near zero. Reduced investment returns limit an insurers ability to achieve their desired return on equity, eliminating previously profitable strategies that depended on the leverage of life and annuity balance sheets. Focus and activity have instead shifted to other methods to counteract the low interest rate markets and accompanying capital strain. Examples include increased mergers and acquisitions activity within the insurance industry and an increasing focus by private equity firms in the insurance market for asset-intensive products, both of which reflect the goal of increasing yield rates on capital.
Attend this session and you’ll hear perspectives on:
• Ways in which insurance firms have shifted to absorb the shocks from COVID-19 and react to the persistent declines in profitability and earnings. • New challenges such strategies faced in a post-pandemic, yet still potentially volatile, environment.
Track: Protecting Long-Term Economic Progress