...Sector Outlook Negative, Rating Outlook Stable The German life insurance sector faces low investment yields and depressed top-line growth. These are the main factors underlying the sector's negative outlook. The difficult operating conditions are already reflected in current ratings. Companies appear reasonably well prepared to face the challenges and to maintain sufficient capital. Fitch Ratings does not foresee a significant number of rating changes over the next 12-24 months. Capital Sufficient but Pressure Will Persist Persistent low interest rates are detrimental to the capital buffers of German life insurers, which have declined continuously since 2008, and Fitch expects capital to remain under stress in 2014. The Zinszusatzreserve (ZZR), an additional reserving requirement in place since 2011, has further hurt current statutory solvency ratios, although it helps to protect companies in a period of prolonged low interest rates. An increase in the ZZR in 2014 is expected to add to...
