Low interest rates could topple insurers, Baloise

Continued low interest rates could cause some insurers to collapse according to the chief executive of Baloise.

Continued low interest rates could cause some insurers to collapse, the chief executive of Baloise has warned.

If interest rates remained low for a prolonged period, some companies offering guaranteed returns on life insurance policies could find themselves in trouble,Martin Strobel CEO of Switzerland's fifth-biggest insurer, told industry experts and newswire Reuters in Zurich.

The collapse of insurers in Japan under such circumstances in the 1990s should be a warning to insurers now, at a time of unprecedentedly low interest rates, he said.

Strobel told the newswire that "classic" insurers which took little risk on financial markets had fared the best in the financial crisis.

"We need to uncouple further financial risk from insurance risk," Strobel said, adding this would preserve the industry's stability.