Asset growth and regulatory consistency provide an important foundation for the development of domestic corporate bond markets in emerging market countries. Based on these factors, Brazil, China, South Africa and Thailand are particularly well positioned for further bond market growth.

Life insurers globally will be forced to accelerate their shift to a less interest-rate sensitive business model after a further fall in bond yields during 2019 put additional pressure on their profitability and economic solvency. Companies that sell savings policies offering high guaranteed returns and those with short-dated assets and long-dated liabilities are most affected.

The negative outlook reflects growing profitability and solvency pressures amid ultra-low interest rates, macroeconomic uncertainty, and rising environmental, social and governance (ESG) risks. Low interest rates weigh on the profitability and solvency of life and non-life insurers alike, while also forcing them to invest in higher-risk assets.

Brexit has been a catalyst for the UK government's increasing policy inertia, loss of policy predictability and diminished cohesion, all of which are reducing the country’s institutional strength. These conditions are affecting the operating environment for a range of UK government-related entities, banks and other debt issuers.