OECD Journal: Financial Market Trends

Frequency :
Semiannual
ISSN :
1995-2872 (online)
ISSN :
1995-2864 (print)
DOI :
10.1787/19952872
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The twice-yearly journal from OECD providing timely analyses and statistics on financial matters of topical interest and longer-term developments in specific financial sectors. Each issue provides a brief update of trends and prospects in the international and major domestic financial markets along with articles covering such topics as structural and regulatory developments in OECD financial systems, trends in foreign direct investment, trends in privatization, and financial sector statistics covering areas such as bank profitability, insurance, and institutional investors.

Periodically, a small number of articles within one field of financial sector developments – constituting the so-called special focus for the particular issue – may be included.

Now published as part of the OECD Journal package.

Article
 

Insurance companies and the financial crisis You do not have access to this content

 
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Author(s):
Sebastian Schich
Publication Date
30 Mar 2010
Pages
15
Bibliographic information
No.:
15,
Volume:
2009,
Issue:
2
Pages
123–151
DOI
10.1787/fmt-2009-5ks5d4npxm36

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The current financial crisis may primarily be a banking crisis, and the solvency of the insurance sector as a whole does not appear to be threatened. Nonetheless, insurance companies have been affected, and in mostly adverse ways. For many insurers, direct exposure to the epicentre of the crisis, the US mortgage market, and to related securities appears to have been limited. But the financial crisis has nonetheless had an increasingly visible impact on the insurance industry, primarily through their investment portfolios, as the crisis spread and financial market valuations and the outlook for real activity deteriorated significantly. Also, a number of concentrated exposures to credit and market risks have been revealed, including in US mortgage and financial guarantee insurance companies, as well as in parts of certain other insurance-dominated financial groups. Thus, while insurers as a group may have cushioned rather than amplified the downward pressures during the financial crisis, some clearly have added to downward pressures. Financial instruments that were at the core of difficulties served an insurance function and, thus, it is not so surprising that some institutions from that sector have been affected by the crisis on one or the other side of their balance sheets.