Insurance Company Risks?
Published / Last Updated on 29/10/2008
Insurance Company Risks?
Many are speculating that Insurance companies will be the latest victims of the credit crunch.
We suggest that insurance companies, whilst not being exposed to borrowing and liquidity risks as they have trillions in assets and positive cashflows in everyday, may have some risk to capital adequacy tests as there share prices and the values of other assets that they own have fallen in value.
This may also then restrict future product development as the instruments needs to back such new or innovative products may only be available at much higher cost if the insurance company is deemed a credit risk.
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