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Member, Beacon International Group, Ltd.
A report by Swiss Re Institute has warned of the risk posed to insurers and reinsurers by the prospect of inflationary recessions and financial instability, Reinsurance News reports. Financial market volatility and potentially higher defaults linked to rising interest rates could hurt both insurers’ assets and specific lines of business. However, higher interest rates are expected to eventually be a silver lining as insurers reinvest maturing bonds into higher yielding bonds.