How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review

Life insurers, whose contractual liabilities include providing minimum guaranteed interest rates to policyholders, are significantly affected by persistently low interest rates. Hence, this study reviews the literature on the prolonged low interest rate environment and its impact on the life insuran...

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Main Author: Suwanmalai W.
Other Authors: Mahidol University
Format: Review
Published: 2023
Subjects:
Online Access:https://repository.li.mahidol.ac.th/handle/123456789/83964
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spelling th-mahidol.839642023-06-18T23:51:58Z How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review Suwanmalai W. Mahidol University Business, Management and Accounting Life insurers, whose contractual liabilities include providing minimum guaranteed interest rates to policyholders, are significantly affected by persistently low interest rates. Hence, this study reviews the literature on the prolonged low interest rate environment and its impact on the life insurance industry, incorporating multiple perspectives and practices in different countries. The effect of low interest rates on life insurance products depends on the sensitivity of the interest rate of each product type and the level of minimum interest rate guarantee. In addition, their impacts on the valuation of life insurance companies depend on shifts in the valuation interest rate, which is used to discount the present value of future benefits, as well as the financial and solvency issues faced by insurers. Overall, the literature suggests that insurers need both short- and long-term solutions to respond to a prolonged low interest rate environment. 2023-06-18T16:51:58Z 2023-06-18T16:51:58Z 2022-08-01 Review Risks Vol.10 No.8 (2022) 10.3390/risks10080155 22279091 2-s2.0-85136711843 https://repository.li.mahidol.ac.th/handle/123456789/83964 SCOPUS
institution Mahidol University
building Mahidol University Library
continent Asia
country Thailand
Thailand
content_provider Mahidol University Library
collection Mahidol University Institutional Repository
topic Business, Management and Accounting
spellingShingle Business, Management and Accounting
Suwanmalai W.
How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review
description Life insurers, whose contractual liabilities include providing minimum guaranteed interest rates to policyholders, are significantly affected by persistently low interest rates. Hence, this study reviews the literature on the prolonged low interest rate environment and its impact on the life insurance industry, incorporating multiple perspectives and practices in different countries. The effect of low interest rates on life insurance products depends on the sensitivity of the interest rate of each product type and the level of minimum interest rate guarantee. In addition, their impacts on the valuation of life insurance companies depend on shifts in the valuation interest rate, which is used to discount the present value of future benefits, as well as the financial and solvency issues faced by insurers. Overall, the literature suggests that insurers need both short- and long-term solutions to respond to a prolonged low interest rate environment.
author2 Mahidol University
author_facet Mahidol University
Suwanmalai W.
format Review
author Suwanmalai W.
author_sort Suwanmalai W.
title How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review
title_short How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review
title_full How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review
title_fullStr How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review
title_full_unstemmed How Do Life Insurers Respond to a Prolonged Low Interest Rate Environment? A Literature Review
title_sort how do life insurers respond to a prolonged low interest rate environment? a literature review
publishDate 2023
url https://repository.li.mahidol.ac.th/handle/123456789/83964
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