Effects of the increased interest level for insurance - expert assessment and uncertainties in the taxonomy

Effects of the increased interest level for insurance - expert assessment and uncertainties in the taxonomy

According to a report by www.boersen-zeitung.de,

The current interest rate environment is leading to positive developments on the insurance market. Various experts agree that the rise in interest rates will have moderate effects in the short term. Guido Bader from the Stuttgart insurance group warns against excessive euphoria as the economic situation remains tense and interest rates could quickly fall again. He assumes that a sustainable profit can only be realized from 2026, when the additional interest reserve can be reduced due to long-term high interest rates.

Andreas Gründermann from Signal Iduna, on the other hand, sees very positive effects of the rise in interest rates in life insurance, while challenges arise from inflation and rising costs in health insurance and property/casualty insurance.

Despite the positive effects of the rise in interest rates, insurance companies are also confronted with burdensome regulations. In particular, the growing expenses related to sustainability reporting and data storage are perceived as disproportionately high. Smaller companies struggle to meet this challenge.

In addition, unclear definitions in the taxonomy cause uncertainty. It is unclear which ESG ratings are reliable and transparent, and some sustainable technologies are not included in the taxonomy list, causing confusion.

Overall, it can be seen that the current rise in interest rates has a positive short-term impact on the insurance industry, but is accompanied by uncertainty and regulatory challenges in the long term.