The U.S. life insurance industry may begin to see some erosion in results in the third quarter, despite strong earnings in the first half, according to a report published today by Standard & Poor’s Ratings Services.
However, the ratings agency does not expect to take many to task for this, in ratings actions, for the rest of the year.
Life insurers faced risks to their stable outlook at the close of the third quarter, due to continued low interest rates, equity market declines and the “specter of a double-dip recession,” S&P stated.
“Still, we believe most insurers have sufficient capital adequacy and liquidity to meet these near-term challenges, and we do not expect to take many rating actions before 2012,” S&P stated. “We are therefore maintaining our stable outlook on the industry, although we may revise more outlooks to negative in the coming months.”
A bright spot is the fact that credit losses have been abating, particularly related to corporate debt and the fact that life insurers withstood the economies vagaries in the first half of the year.