Despite pressures from the sluggish economic recovery and low interest rates, the U.S. life insurance sector remains financially strong, characterized by high levels of capitalization, solid liquidity, high-quality investment portfolios, good financial flexibility and modestly improved profitability, according to Moody's Investors Service.
In its report, "U.S. Life Insurance — Industry Scorecard," Moody’s said the still-low interest rate environment will continue to compress spread margins for fixed annuities and universal life insurance, and pressure profits from long-tailed liabilities such as disability income, long-term care, payout annuities and variable annuities (VA) with guarantees.
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