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French life insurers armed to deal with the rapid rise in rates

2023-03-30T17:19:25.828Z


DECRYPTION - The sector does not see any change in behavior among savers. Are life insurance companies well equipped to deal with rapidly rising interest rates? In recent weeks, at the height of the banking crisis, the markets have been asking themselves the question, and the shares of major insurers such as Axa and Allianz have swayed. Investors were worried about the repercussions of this rally on life insurance portfolios, which are largely made up of bonds and whose


Are life insurance companies well equipped to deal with rapidly rising interest rates?

In recent weeks, at the height of the banking crisis, the markets have been asking themselves the question, and the shares of major insurers such as Axa and Allianz have swayed.

Investors were worried about the repercussions of this rally on life insurance portfolios, which are largely made up of bonds and whose market value has depreciated.

In the current context, insurers would incur losses if they were forced to sell their securities before their maturity, to cope with large redemptions by savers looking for more profitable assets.

This is what happened for Silicon Valley Bank (SVB).

The Californian regional bank, which held a lot of bond assets, not hedged against a rise in rates, was swept away by a wave of massive withdrawals from its customers.

More worryingly, Italian life insurer Eurovita is threatened with…

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Source: lefigaro

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