Fitch: Low Rates a Risk, But German Insurers Can Meet Guarantees

April 22, 2015 10:59 AM

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(The following statement was released by the rating agency) FRANKFURT/LONDON, April 22 (Fitch) Sustained low interest rates are the biggest risk for European insurers, and German firms are the most exposed in the region due to their widespread use of guaranteed returns, Fitch Ratings says.

We estimate that at today's low rates Fitch-rated insurers could continue to generate investment returns above the rates they have guaranteed to customers for almost a decade. But low rates also put pressure on capital and squeeze earnings, which could lead to downgrades. Smaller, unrated insurers m...

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