The North American life insurance industry continues to maintain reasonable balance sheet strength and debt-servicing capacity, according to a new report from Fitch. In fact, financial leverage among life insurers was at a four-year high as of the end of 2012, thanks to steady increases since 2009, which Fitch partially attributes to increased debt issuance and a decline in shareholders’ equity.
The report, “Life Insurers’ Financial Leverage and Debt-Servicing Capacity,” analyzes key credit metrics of life insurers in its ratings universe, of which roughly half had leverage and coverage that fell outside media guidelines for the rating categories at year-end-2012 with the most pronounced differences being at the higher rating levels, according to Fitch.
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