Rating stability for the U.S. life insurance industry reflects the sector’s strong balance sheet fundamentals and improved liquidity profile, according to Fitch Ratings’ new report, “U.S. Life Insurance Sector Update.”
According to Fitch, these factors help mitigate ongoing concerns over challenging macroeconomic conditions pressuring industry operating fundamentals. The large majority of Fitch rating actions taken on its North American insurance portfolio in 2012 and into 2013 were affirmations with stable outlooks, Fitch reported.
Fitch’s key rating concerns include uncertainty over macroeconomic conditions due to ongoing turmoil in Europe, sustained low interest rates and overall weak economic recovery both in the U.S. and abroad. In a statement, Fitch said it expects sustained low interest rates over the next two years to negatively affect earnings growth rates, but will not have a material effect on industry capital.
If interest rates remain low much beyond 2014, Fitch’s life insurer rating outlook would likely turn negative, the company predicted.
Fitch: Credit outlook for U.S. life industry to remain stable via IFAwebnews .