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Article: Economy hurts life/health yields.(Life: Asset Management)(Company rankings)
- Article from:
- Best's Review
- Article date:
- October 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 A.M. Best Company, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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For most life/health insurers, overall investment yields are at five-year lows. In fact, 20 out of the top 25 companies had declining investment yields in 2008.
This reflects several things. First is the decline in overall yields during the last year for short-term Treasury bills and the benchmark 10-year Treasury note, which was partially offset by widening credit spreads for the fourth quarter of 2008. Investment yields were also pressured by lower alternative asset income in 2008.
Perhaps more significantly, the short-term, three-month Treasury bill yield was virtually zero during the fourth quarter of 2008. Many companies with large equity market ...
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