Eurozone debt writedown could cost insurers €143bn
Prolonged low interest rates could threaten insurers’ solvency, Swiss Re warns
European insurers could lose as much as €143 billion (£122 billion) if they were forced to write down the value of their peripheral eurozone government bonds, Swiss Re has estimated.
The loss, which assumes that insurers take a 50% haircut on bonds issued by Greece, Ireland, Portugal, Spain and Italy, would amount to nearly one quarter of shareholders' funds.
Insurers would be able to withstand losses on this scale, said Swiss Re senior economist Darren Pain. "Capital buffers appeared adequate
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