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US life insurers’ RBC ratios increase to 445%
Written by Adam Cadle
07/05/2024
RBC ratios for Fitch’s universe of US life insurance companies increased eight percentage points to 445% in 2023, compared to the previous year.
Strong operating results benefited from favourable equity markets and investment returns driven by reinvestment rates in 2023.
Interest maintenance reserve (IMR) balances continued to decrease in 2023, as companies realised fixed income and derivative losses. Fitch estimated that the admissibility of negative IMR balances positively impacted its rated universe’s aggregate RBC ratio by four percentage points in 2023.
The ratings agency said it expects statutory capital positions to continue to improve in 2024, reflecting normalisation in alternative asset returns, along with rising portfolio yields benefiting from the higher interest rate environment.
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