Falling interest rates in India: Should life insurers be worried?

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By Philip Jackson, Richard W. Holloway, Sanket Kawatkar, Shamit Gupta | 22 November 2016
Interest rates in India have historically been significantly higher than most of its Asian counterparts, but there has been a steady decline in the yield curve over the past few years. In November, the Indian government announced a demonetisation scheme, and one impact of this could be a further reduction in the interest rates given the increased liquidity with the banks. The sudden reduction in interest rates can be expected to have an adverse impact on life insurance companies operating in the market.