Liability Management and Solvency of Life Insurers in a Low-Interest Rate Environment: Evidence from Thailand
Issued Date
2025-07-01
Resource Type
eISSN
19118074
Scopus ID
2-s2.0-105011631458
Journal Title
Journal of Risk and Financial Management
Volume
18
Issue
7
Rights Holder(s)
SCOPUS
Bibliographic Citation
Journal of Risk and Financial Management Vol.18 No.7 (2025)
Suggested Citation
Suwanmalai W., Zaby S. Liability Management and Solvency of Life Insurers in a Low-Interest Rate Environment: Evidence from Thailand. Journal of Risk and Financial Management Vol.18 No.7 (2025). doi:10.3390/jrfm18070397 Retrieved from: https://repository.li.mahidol.ac.th/handle/123456789/111467
Title
Liability Management and Solvency of Life Insurers in a Low-Interest Rate Environment: Evidence from Thailand
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Abstract
This research investigates the liability management of Thai life insurers in a prolonged low-interest rate environment. It examines the impact of interest rate changes on life insurance products, solvency, and profitability. The study identifies a significant shift in product portfolios toward non-interest-sensitive products, which helps mitigate financial risk and enhance solvency. The solvency of Thai life insurers is influenced by their return on assets, with higher risk exposures requiring more capital, potentially lowering solvency levels. However, the proportion of risky investment assets is not significantly related to the solvency position in the Thai market. The market index return is a significant predictor of stock returns for Thai life insurers, while changes in interest rate sensitivity are not statistically significant between low-rate and normal periods. The average solvency level under Thailand’s regulatory regime is also not statistically different between normal and prolonged low-interest rate situations. This study contributes to the understanding of liability management practices among life insurers in Thailand and provides insights into the challenges and strategies for maintaining solvency and profitability in a low-interest rate environment.