Following ultra-low interest rates over the past decade, German life insurers now face new challenges as they keep rising bringing with them both favourable and unfavourable consequences for the sector, according to a recent report by S&P Ratings.
On the one hand, higher rates will mean a rise in net investment yields, while on the other the sector’s exposure to unrealized losses and less-liquid assets may present risk, coupled with pressure on business volumes, the rating agency pointed out.
