The U.S. life insurance industry has taken solid strides toward improving risk management.[@@]
An analyst at Standard & Poor’s, New York, gives that assessment in a new report on the U.S. life sector.
The sector has seen a healthy earnings recovery “with solid revenue potential and very strong capitalization,” says S&P analyst Rodney Clark.
“We see the potential for greater earnings stability for this sector over the near term as refinance risk is becoming less of an issue due to the fact that products are increasingly being sold in multi-years of 4-, 5- and 7-year increments instead of 1,” Clark says.
Corporate bond defaults remain low, but that could begin to change in 2006, Clark says.