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Negative Interest Rates and the Insurance Agency

The current low interest rate environment has impacted many segments of the US economy even insurers. While research has been conducted on the consequences of a sustained low interest environment and a transition to higher interest rate environment on insurers i, there is little available on how insurers might react to a sustained negative interest rate environment. The purpose of this study is to create a resource for risk managers and others to enhance current practices in managing and mitigating the risk of a sustained low interest rate environment.    


The CAS/CIA/SOA Joint Risk Management Section Research Committee (JRMSRC) are seeking researchers to perform a study of the potential impact of a sustained negative interest rate environment on the insurance industry. The following are proposed topics that may be addressed:

  • Discuss the potential impact of negative interest rates on the insurance industry as a whole and the impact to policyholder behavior.   Include both qualitative and quantitative analysis.
  • Examine its impact to specific insurance products.
  • Given the current sustained low interest rate environment, how are companies managing the potential risk of a sustained negative interest rates.
  • Discuss potential government and insurer actions as a result of the market dynamics. For example, will insurers look to the consumer to make up for the lost interest income?
  • Discuss potential opportunities for the insurance industry in a negative interest rate environment
  • What are the views on the floor of the market interest rate from an insurance industry perspective and non insurer perspective?
  • How will models need to be adjusted to reflect possible negative interest rates in light of business as usual and stress testing?   
  • What distribution for low/negative interest rates are being used in modeling and how can a distribution be determined in a negative/low interest rate environment?
  • At what interest rate level will there be a negative impact on insurers and available guarantee funds in case of insolvency?
  • How should negative interest rates be incorporated into the discounting of insurance losses?

Note that the above list is not meant to be exhaustive but merely examples of proposed topics that may be researched. The project description and expected deliverable(s) have been intentionally written to be brief to give researcher(s) sufficient latitude in the development of the proposals. 


To facilitate the evaluation of proposals, the following information should be submitted:

  1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
  2. An outline of the approach to be used (e.g. literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, possible limitations of the analysis, and the definition/criteria for interest rates included in the scope of the study.
  3. A description of the expected deliverables and any supporting data, tools or other resources.
  4. Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
  5. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions.  The JRMSRC is interested in completing this project in a timely manner.  Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
  6. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.


The JRMSRC will appoint a Project Oversight Group (POG) to oversee the project.  The POG is responsible for the selection of the proposal to be funded.  Input from other knowledgeable individuals also may be sought, but the POG will make the final decision. The SOA's Research Actuary will provide staff actuarial support.


Any questions regarding this RFP should be directed to Ronora Stryker, SOA Research Actuary (phone: +1-847-706-3614); email: 


If you intend to submit a proposal, please e-mail written notification by February 3, 2017 to Jan Schuh.


Please e-mail a copy of the proposal to Jan Schuh.

Proposals must be received no later than February 10, 2017. It is anticipated that all proposers will be informed of the status of their proposal by March 10, 2017.

Note: Proposals are considered confidential and proprietary.


The JRMSRC reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The JRMSRC also reserves the right to redirect the project as is deemed advisable.

The CAS, CIA, SOA plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The CAS, CIA, SOA may choose to seek public exposure or media attention for the research.  By submitting a proposal, you agree to cooperate with the CAS, CIA, SOA in publicizing or promoting the research and responding to media requests.

The CAS, CIA, SOA may also choose to market and promote the research to members, candidates and other interested parties.  You agree to perform promotional communication requested by the CAS, CIA, SOA, which may include, but is not limited to, leading a webcast on the research, presenting the research at an CAS, CIA, SOA meeting, and/or writing an article on the research for an CAS, CIA, or SOA newsletter.