Abstract
Abstract Focusing the perspective of German life insurance industry, this article starts with a brief description and discussion of the financial impact of the persistently low interest rate environment. Based on an empirical data set of German life insurers, the author illustrates actual limitations to generate sufficient investment income for to meet the given specific financial guarantees. Moreover, the core problem, caused by the use of volatile timingrelated interest rates for to evaluate long-term cash flows, becomes obvious. The currently observed regulatory interventions are trying to overcome the existential consequences of the so-called fair value measurement. In consequence, the author derives four central theses: 1. Life insurance in Germany suffers from insufficient capital adequacy. 2. Persistent low interest rates threaten the fulfillment of financial guaranty commitments of German life insurers. 3. The generally accepted principals of economic evaluation do not satisfy to the traditional business model of German life insurers. 4. Under a business perspective, the development of new life insurance products is inevitable.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
