AM BestTV: Germany’s Life Sector Burdened by Product Commitments and Reserving, Says AM Best Financial Analyst

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- In this ^AMBestTV episode, Martina Seydoux, financial analyst, AM Best, said Germany’s life insurers are squeezed by commitments to products that require higher margins, although amended regulations will require them to reserve less against prolonged low interest rates. Click on http://www.ambest.com/v.asp?v=germanlife519 to view the entire program.

Seydoux highlighted a few of the main drivers for AM Best’s negative outlook on Germany’s life insurance sector.

“The main reasons for the negative outlook are the persistent low interest-rate environment and the limited ability of German life insurers to change their business mix,” said Seydoux. “AM Best expects these players to remain reliant on the traditional products with interest rate guarantees that currently are costly. The next driver is the pressure on operating earnings, which the recent legislative change has lighten.”

Seydoux also addressed the balance sheet strength of Germany’s life insurers.

“On the aggregated balance sheet level, AM Best views it as strong. There are differences amongst the various players in the market; however, mainly for the larger insurers, their balance sheets remain strong. As for the smaller players, they are likely to continue reporting more modest solvency levels.”

To access a copy of this market segment report, titled, “Market Segment Outlook: Germany Life”, visit http://www3.ambest.com/bestweek/purchase.asp?record_code=284268 .

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^AMBestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View ^AMBestTV episodes at http://www.ambest.tv.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.