Insurance companies as major investors are a potential source of systemic risk
Savolainen, Eero (09.06.2015)
Volyymi
89Numero
2/2015Julkaisija
Bank of Finland
2015
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201506101276Tiivistelmä
Insurance companies promote economic activity by offering savings products and protection against risks. At the same time, insurance companies themselves are also investors. The reliability of insurance business is important for the economy as a whole. The low level of interest rates weakens insurance companies’ investment returns and increases the market value of liabilities in the sector; when protracted, this poses problems, particularly for life insurers. Systemic risks in the insurance business have begun to attract attention, especially in consideration of insurance companies’ importance as significant institutional investors.