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A survey of European life insurance companies that collectively oversee €2.73 trillion in assets, commissioned by AlphaReal, the specialist manager of secure income real assets, reveals inflation is the biggest macro risk facing the sector.
The Eurozone’s headline inflation rate (HICP) recorded a high of 10.6% last October and remains above the European Central Bank’s 2% target. Likewise in the UK, the CPI was at 11.1% last October and is still significantly higher than the Bank of England’s 2% target. Stubborn and persistently high inflation presents challenges for European life insurers, as does the risk of future inflation shocks. This is because Insurers have substantial inflation-linked liabilities.
AlphaReal’s survey revealed that 21% of...
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