Life Insurers Seen Adding Risk Amid Low Rates, Treasury Says

U.S. life insurers, a group led by MetLife Inc. (MET) and Prudential Financial Inc. (PRU), face pressures from low interest rates that could lead to taking on more investment risk, according to a report from U.S. Treasury Department.

“Insurers may be tempted to ‘reach for yield’ by investing in higher-yielding, but riskier, assets,” the Treasury’s Federal Insurance Office said in a report today. “A sustained low interest rate environment may lead insurers to offer products for which risk management becomes more tenuous.”

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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