Broad demographic forces should make most of the next 50 years great years for life insurers.
Steven Schwartz, a senior vice president in the Chicago office of Raymond James & Associates, gave that assessment during an insurance conference organized by the New York Society of Securities Analysts.
In the short term, Schwartz said, life insurers face many challenges, including weak flows of cash into variable annuities, questions about how to price VA benefit guarantees, and a number of regulatory concerns.
The current flat yield curve is hurting sales of some products, and some life insurers are having a hard time earning enough on their own investments to profit from older policies that guarantee customers minimum rates of 4% to 5%, Schwartz said.
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Over on the regulatory front, the Bush administration failed to extend cuts in capital gains to variable annuities, and it has proposed tax breaks for new savings accounts that could put life insurers at a disadvantage, Schwartz noted.