So what we’ve learned so far is that both persistently low interest rates and an abrupt hike in interest rates can pose serious problems for insurance undertakings. And this observation brings us back to Jacques Piccard’s intrepid diving expedition, which I mentioned in my opening remarks.
In today’s low interest rate environment, you could say that insurers are a lot like divers: For a while, they are fine in the deep. But if the dive lasts longer than expected, they risk running out of oxygen at some point. On the other hand, coming back up too quickly can result in decompression sickness.