Tuesday, January 24, 2017

SCOR CEO Says Quantitative Easing Inflicts ‘big costs’ on Euro area Insurers

the ecu significant bank’s bond-buying plan won't help the area’s economic recovery while it makes the funding choices harder for insurers and reinsurers, SCOR SE leader govt Officer Denis Kessler said.
“It’s too late, it has been badly tailor-made, it’s badly formed,” Kessler, 62, stated in a Bloomberg television interview with Francine Lacqua and man Johnson on Thursday [March 5], relating to the ECB’s quantitative easing plan. “We pay a large cost nowadays because the return at the property side could be very low.”
ECB President Mario Draghi’s pledge to buy 60 billion euros ($66 billion) of belongings a month through September 2016 can also create bubbles in actual estate or some fairness markets, while squeezing returns on government bonds, Kessler stated. That reduces an insurer’s investment alternatives due to the fact ecu guidelines impose no capital prices on sovereign bonds at the same time as requiring “pretty excessive” costs for investing in corporate bonds or equities, Kessler said.
SCOR, France’s biggest reinsurer, doesn’t plan to smooth authorities bonds to the ECB, Kessler said. The Paris-based totally enterprise had 16.2 billion euros in invested assets at the quit of December, approximately 33 percentage of which turned into in government and comparable bonds, in line with its internet site.

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