The question was: Do most of the world's life insurance companies have enough cash and access to cash to cope with periods of severe financial stress?
a) Yes, most do
b) No
c) Maybe
d) Only one country can do it
e) Don't know
The answer is: a), yes. Most of the world's life insurers do have enough cash and access to cash to cope with periods of severe financial stress, according to analysts at Mood's Investors Service, New York. The rating agency applied a "global stress test" to this question. Among other things, the test measures the risk that insurance operating company liabilities may "cost more than expected due to performance of secondary guarantees and/or elevated hedging costs," say Moody's analysts. The results confirmed that "the liquidity of most life operating companies is sufficiently strong to weather a severe stress liquidity event," the analysts say.
