The deep recession caused by COVID-19, low interest rates, surging unemployment and financial market volatility will weaken life insurance premium growth in 2020. New sales of life insurance and annuity products is negatively affected by social distancing as agents are not able to meet new prospects and clients. Potential downgrades and possible defaults on fixed income investments can strain the capital position of insurers. The risks to life insurers have increased and they will be challenged to maintain returns in 2020. Despite increasing risks, the capital position of the life insurance industry remains strong.
Life insurance industry faces increasing risks due to spread of COVID-19.
Unusually low interest rates and capital market volatility will put pressure on investment yields.
Downward rating migrations can strain the capital position of insurers.
Overall, life insurance industry remains well capitalized to withstand risks in current environment.
In 2019, while ordinary life saw surge in sales, annuity sales slowed down significantly.