Insurers urged to seek solutions to low interest rates

FACED with persistent low interest rates, insurers need to proactively seek solutions to beat the blues, said analysts, adding that they could either reprice products or adjust new business guarantees or bonuses to reflect the market rate, among other measures.

This is necessary as the current historical low interest rate environment has led to shrinking net investment yields that have added on to insurers' margin pressures.

In Singapore, effective yields are influenced by expected foreign interest rates and foreign exchange rate movements, said Philip Chung, analyst with Standard & Poor's.