Outlook for life insurance positive, depending on rates

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Outlook for life insurance positive, depending on rates
News from InvestmentNews:

The longer-term outlook for life insurance companies is a positive one — provided the companies can navigate low interest rates successfully.

A poll of attendees at the Standard and Poor’s annual insurance conference in New York on Thursday revealed that 54% of the participants believed that low interest rates are the greatest risk facing life insurance companies. Policyholder options and guarantees came in second, with 21% of the vote.

Even though interest rates have been low for years now, they remain a primary concern among investors who are interested in life insurers.

Low interest rates hurt insurers primarily because carriers are heavily invested in bonds. As low rates hurt bond returns, it affects carriers’ profitability and places pressure on interest-rate sensitive products, such as universal life insurance, fixed annuities of all types and variable annuities with guaranteed living benefits. Indeed, the 10-year Treasury — the key rate for life insurers — is currently sitting at 2.6%.

All will be well if insurers watch the credit quality of their investments and as long as rates rise gradually, analysts at the S&P conference noted.

“The consensus at the start of this year was for higher rates; we haven’t quite seen that materialize yet,” said Matt Daly, director of credit research at Conning Asset…………… continues on InvestmentNews

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Service helps find lost life insurance – Winston-Salem Journal
News from Service helps find lost life insurance – Winston-Salem Journal:

Posted: Friday, June 6, 2014 5:45 am

Wayne Goodwin, the state’s insurance commissioner, said the department is offering a lost life insurance and annuity inquiry service to help consumers locate benefits from life insurance policies or annuity contracts purchased in North Carolina.

“This important service will allow us to work closely with insurance companies to help people locate lost policies,” Goodwin said.

… Read the full article

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