In brief: Despite a rocky few years, the life insurance industry in the United States is expected to stabilize in 2012, says Fitch.
The full story
The ratings and prediction company says that with the industry's strong balance sheet fundamentals, concerns over challenging macroeconomic conditions pressuring operating fundamentals will be mitigated, giving the industry as a whole a stable outcome for 2012.
"Industry capitalization has been restored to pre-crisis levels driven by improved earnings and other capital management initiatives. Further, the industry's liquidity profile has strengthened significantly relative to pre-crisis levels driven by improved investment valuations, increased capital market liquidity, and management actions," says the Fitch report.
Fitch expects positive trends in industry earnings performance and investment results reported in 2011 to be pressured in 2012 due to low interest rates, increased hedging costs, and ongoing market volatility.
Summing up
Rating concerns, according to Fitch, will be if a default in Europe is seen and the low interest rate environment affecting insurance company revenues.
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