Interest Rate Risk for Insurance Companies
Channel: Chris Grande
Date: 2019-08-26

In 2015 and 2016, as interest rates had stayed too low for too long, we started hearing more from executives at insurance companies about the difficulty for them to earn a satisfactory return in a low rate environment.

Some discussed the need for eventual drastic measures if rates did not increase. The increase in rates over the past 2 years had reduced the "volume" on this issue, but with renewed calls for lower rates, this problem will resurface and this time may cause serious issues for all involved (premium increases, reduced dividends and annuity earnings, and maybe some defaults?).

In this video, I introduce the idea and plan to follow up with some more detailed information. For clients, rigorous research of insurers is ongoing (many of you have heard my preference for using top-rated mutual insurance companies as a preference) and client insurers will continue to be reviewed for stability and strength.

Thanks for watching.

Remember to 80/20 Your Money (and your entire life!)

Warmly,

Chris Grande, MSIM, CFP®, RMA®
Now the Bicoastal Advisor! 
https://chrisgrande.com/
Interested in working together?
https://www.planwithchris.com/planwithchris


Note:

My articles and videos are meant to be educational and not specific advice. I assume my readers are big boys/girls and understand that, but in today’s climate I have to tell everyone again anyways – people might do something dumb and go hurt themselves! (like stick a fork in an electric socket or something – don’t do that!). Consult a qualified advisor before attempting financial strategies that you don't fully understand.