Property and casualty insurers are in a better position to deal with declining interest rates than their life insurance counter-parts because yearly renewal rates can be adjusted to compensate for their decline in earnings, a recent report from Swiss Re says.
The report, "Facing the Interest Rate Challenge" reviews the history of interest rates over the past 30 years and reviews why life insurers are at a disadvantage, losing money on life products with fixed rates and unable to adjust to declines unless programs are replaced with new products.
On the other hand, P&C insurers can use renewal periods to re-price their products, making it a less "thorny" road for carriers.
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