Low Interest Rates Threaten Insurers and Baby Boomers

Here you get a glimpse at the problems facing insurers and baby boomers thanks to the Fed’s zero percent interest rate policy as reported earlier this month in the WSJ.

Insurers reported a messy second quarter plagued by low interest rates and catastrophe claims, highlighted by a $2 billion charge at MetLife Inc. tied to a savings product popular with baby boomers.

Life insurers MetLife, Prudential Financial Inc. and Lincoln Financial Group booked lower premiums and fees, while property-and-casualty insurer Allstate Corp. faced elevated levels of claims for severe weather, including a record hail storm in Texas.

Lincoln Financial was the only insurer of the group to eke out an increase in operating earnings; the other three companies posted double-digit declines.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.