Forecasters at organizations of all kinds have been getting out their 2020 crystal balls.
Here’s a distillation of some of the forecasts pouring into our inboxes. (We’ve included links to the forecast documents only when we could find copies of the documents in front of paywalls.)
1. The Overall Business Climate
Morgan Stanley securities analysts talked about 2020 interest rates in an assessment of MetLife Inc.’s 2020 guidance.
MetLife predicted that the 10-year Treasury yield could stand somewhere between 1% and 1.76% at the end of 2020. The Morgan Stanley analysts say MetLife’s macroeconomic assumptions look reasonable.
Principal Financial Group Inc. conducted a survey of about 600 owners of small and medium-sized businesses and found that:
- 76% are concerned about health benefits costs.
- 67% are concerned about retaining talent.
- 54% are concerned about attracting talent.
2. Life Insurance
Deloitte analysts are predicting that:
Global life and annuity premium growth could increase to 2.9% per year over the next two years, compared with 0.6% over the past decade.
Top obstacles include:
- The Brexit and trade wars.
- The U.S. elections.
- Falling interest rates.
Keefe, Bruyette & Woods Inc. analyst Ryan Krueger says the life and annuity issuers he tracks:
- Have had decent earnings.
- Face problems from low interest rates.
Krueger says the impact of low rates will compound over time.
The Deloitte analysts say obstacles include:
- Low interest rates.
- A shift to risk-based solvency regulation framework especially in Europe.
The Deloitte analysts predict that, in the United States, indexed annuities will continue to do better than variable annuities.
4. Long-Term Care Insurance
Fitch Ratings analysts say they believe the long-term care insurance issuers they rate have LTCI coverage exposure levels that are, generally, manageable, but that some issuers continue to base their reserves on “inconsistent and aggressive assumptions tied to discount rates, future premium increases, persistency and morbidity.”