The Changing Roles of Emerging Economies and the Insurance Sector
IMF Blog, April 4, 2016
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- Authors: iMFdirect
- Published: April 4, 2016
Emerging economies — key findings
- Changes in their asset prices explain over a third of the rise and fall in global equity prices and exchange rates.
- Rising financial ties, more than emerging economies’ growing share of global GDP and trade, is the key factor behind their increasing financial impact on other countries.
- While economic news from China does affect global equity returns, spillovers from Chinese asset price shocks remain limited relative to those of financially more integrated emerging market economies including Brazil, Mexico, and South Africa.
Insurance sector in major advanced economies — key findings
- Life insurers have contributed more risk to the financial system as a whole since the global financial crisis.
- Insurers are large institutional investors holding over $24 trillion in global assets and longer-term liabilities.
- Insurers have become more exposed to swings in asset prices in recent years.
- Low interest rates are an important source of risk for insurers.
- The lower the level of interest rates, the more vulnerable insurers become to further interest rate changes.
Timing and ongoing work
- Publication date: April 4, 2016.
- The IMF will release more analysis of the global financial system on April 13.
Source: IMF iMFdirect blog post "The Changing Roles of Emerging Economies and the Insurance Sector", April 4, 2016.