Moody's Emphasizes Stability Of Western European Life Insurers

By Staff Writer

June 07, 2001 at 08:00 PM

Share & Print

NU Online News Service, June 7, 11:15 a.m. – Moody?fs Investors Service, New York, has issued a new report emphasizing its faith in the strength and stability of the Western European life insurance industry.

Dutch, German and French financial services companies with major life operations have made a series of major life and mutual fund company acquisitions in the United States.

Executives at the companies have frequently emphasized their worries about the effects of the rapid aging of the Western European population.

But Moody?fs analysts emphasize in the new report, "Moody?fs Rating Methodology: European Life Insurance," that most large European insurance companies still have excellent insurance ratings.

"The overall strength of the European life insurance industry is underpinned by the fact that the default of a life insurance company has so far been a rare or even unknown event in many European countries," the analysts write in a summary of the report.

"Solvency is rarely seen as an issue for the large European life insurers, which maintain a level of financial leverage that is reasonable and moderate overall compared with their debt capacity," the analysts add.

The analysts predict the aging of the European population will do more to help life insurers?f retirement programs than to hurt them.

Although the oldest Western European baby boomers may soon begin drawing funds from retirement accounts, younger boomers are continuing to pour money in, and Western European governments are supporting private financial services companies by encouraging greater use of private retirement savings programs, the analysts write…

NOT FOR REPRINT