U.S. economic growth is on track, but insurers will need strong underwriting to cope with anemic investment returns.[@@]
Kurt Karl, the chief U.S. economist at Swiss Reinsurance Company, Zurich, gave that assessment today during Swiss Re's mid-year economic and insurance industry review.
Among the predictions Karl made are:
- Overall economic growth in the 3% range.
- Unemployment declining to 4.5% by the end of the year.
- A 4.5% federal funds rate by the end of the year.
The biggest risk is the potential for the price of oil to skyrocket, Karl said. If the price of oil jumps to $80 a barrel from its current price of about $60 a barrel, that would knock a half a percent off of the growth rate, pushing it down to 2.8%, Karl said.
