EU Insurance Watchdog Says Test Shows Risks of Low Rates
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One in four European insurers may struggle to meet promises to policyholders in a prolonged period of low interest rates, the European Union’s insurance watchdog said following a stress test of the industry.
These insurers will need to raise capital and watch their balance sheets and investments more closely, the European Insurance and Occupational Pensions Authority, or Eiopa, said today during a conference call from Frankfurt. It has been running tests on the industry since April to see how it would be hurt if interest rates remain low for the foreseeable future.