U.S. life insurers remain strong in difficult economy

The U.S. life insurance industry remains financially strong despite pressures from the sluggish economic recovery and low interest rates, according to a new report.

Moody’s discloses this finding in an October 2013 Special Comment: “U.S. Life Insurance: Industry Scorecard.” The report highlights the key credit factors Moody’s reviews when assessing insurers in this sector. The report is analogous to a Moody’s Credit Opinion, but covers a complete sector on a composite basis.

“In general, the sector is characterized by high levels of capitalization, solid liquidity, high-quality investment portfolios, good financial flexibility and profitability that has improved modestly over the last few years but remains under pressure,” the report states. “Companies have generally continued to de-leverage and de-risk their product portfolios and rationalize their allocation of capital to businesses in order to strengthen their credit profiles.”