Insurers: Testing times

European insurance companies face testing times. The fall in equity markets and the rising risk of corporate bond defaults are eroding their capital buffers. Stock markets took fright last week and drove some insurers down by about a third – although they recovered a little this week. If markets deteriorate further and the recession drags on, insurers may have to bolster their finances. Most insurance companies have built up sizeable capital buffers in recent years – partly because profits have ...