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Fitch Keeping an Eye on Riskier European Insurer Investments

European insurers investments are becoming riskier, and that could mean negative ratings implications for the carriers, Fitch Ratings says.

By staff Writer | Updated on January 20, 2014

European insurers’ investments are becoming riskier, and that could mean negative ratings implications for the carriers, Fitch Ratings says.

Fitch notes that the increase in risk is small so far, but outlines its concerns: “While there has not been a huge shift by insurers from bonds into riskier asset classes, credit-risk exposure within bond portfolios has materially increased,” the ratings agency says. “There has also been a tendency for insurers to invest for longer durations. Although the increase in risk within bond portfolios has not reached a level that would result in downgrades, Fitch views this development as potentially credit negative.”

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