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.

In our latest State of the US Consumer report, we discuss how consumption will likely remain a bright spot in 2020 among otherwise slowing drivers of the economy.