Moody's said the outlook for the global life insurance sector in 2020 is stable, as low interest rates continue to challenge the industry.
The rating agency said insurers are moving to adapt their products to low interest rates, noting that less interest rate sensitive, fee-based and capital-light products such as unit-linked and protection policies create some security against the prevailing environment.
Also factoring into the outlook is insurers' "solid" regulatory capital, which has received support from "robust" equity markets and insurers' profitability. Solvency ratios are "comfortably above regulatory minimums," the rating agency said.
While insurtech companies may disrupt some insurance lines and functions, "a growing trend of collaboration" is conducive to modernizing the life insurance sector and will also provide some protection from disruption, Moody's said. GDP and unemployment levels continue to help the industry grow, but the global economy is slowing and not good for rising interest rates, according to the rating agency.
Moody's still sees the life insurance sectors of Germany, Norway and Taiwan as most exposed to an extended period of low interest rates.