The influence of interest rate on insurance companies
|Year of publication
|Article in Proceedings
|Proceedings of the 9th International Conference on Currency, Banking and International Finance
|MU Faculty or unit
|Management and administrative
|balance sheet; insurance company; life insurance
|A protracted period of low interest rate threatens the stability of the life insurance industry, especially in the countries, where life insurance with comparatively high guaranteed returns disposed in the past represent a major portion of the total portfolio. The aim of this paper is evaluation of the effects of the actual low interest rate period on the balance sheet of a representative life insurance company, given the actual asset allocation and the outstanding liabilities. To do so, we use simulation of the term structure of interest rates.