Although most US life and annuity insurance companies begin 2016 facing many of the same challenges present in 2015, there is a heightened sense of urgency for owners, shareholders and policyholders to ensure companies are not continually increasing risks, according to A.M. Best.
An A.M. Best report, Challenges Look Similar for U.S. Life & Annuity Industry But No Time for Complacency, has cited a number of factors that will continue to pose hurdles; chief among them are historically low interest rates, marginal to declining premium growth and regulatory uncertainly.
Go deeper with GlobalData
However, the report noted that life and annuity companies are facing new challenges as well, including the aggregation of longevity exposure from increasing life expectancy trends, the rise of cyber risk as a life "catastrophic" event and increasing investment risk from traditional and non-traditional asset classes.
A.M. Best has maintained a stable outlook on the US life and annuity industry for 2016. The ratings agency said most insurers currently maintain ample levels of risk-based capital to absorb expected and unexpected shocks.
Improving results
It explained that the industry is characterized by improved underlying financial results, improved asset/liability management capabilities and modest product features with minimal signs of a renewed "arms race" among competitors.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe report stated that 2016 is likely to bring further divergence in global economic conditions and financial markets, though the US. economy should continue to grow modestly, driven largely by domestic demand in contrast with many emerging and mature economies.
The year ahead is also expected to bring about change driven by evolving regulations, the potential for rising interest rates, increased leverage of new technologies, shifting consumer trends and other challenges.
