Low Interest Rate Environment – When the going gets tough, the tough get going

The continues drop in interest rates creates major challenges to be faced by life insurers. In particular, the current market environment is exceptionally challenging for those life insurers who carry long-term traditional life guaranteed products.

This paper provides a qualitative analysis on the impact of the low interest rate environment on life insurers and proposes recommendations to face these challenges.

The paper first looks at the lessons learned from previous crisis by analysing the market experience of life insurers in Japan and how these experiences compare to the current European market environment. The paper continues with the current understanding of the situation of European life insurers, including deep dive case studies for the French and German markets. The paper concludes with toolboxes on ALM and product strategies, providing a list of relevant topics and perspectives on the challenges ahead.

The CRO Forum welcomes feedback and comments on the paper.

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