Pendulum swings back to the life market in battle for funds

By Adrian Ladbury

THE life insurance sector appears to be fully back in favour among analysts after a brief period during which the pendulum swung the way of the normally subordinate non-life business. Opinion favoured the global non-life sector for much of last year as it benefited from the rapidly hardening underwriting conditions while life companies suffered even more acutely from the poor investment conditions. Even as late as February this year, consulting firm Mercer Oliver Wyman published a report that stated the capital crisis in the European life sector had led to an aggregate capital shortfall of E100bn ($121bn). The firm noted the crisis was probably over then and two weeks ago followed up with a more upbeat analysis of the life market, in which it predicted the sector will generate $1.6trn in shareholder value over the next 10 years.