FTSE 350 Review 2018 

FTSE 350: Life assurers strong on income

FTSE 350: Life assurers strong on income

This time last year expectations of ‘Trumpflation’ – the belief that President Trump’s policies could help lift fixed income prices – coupled with the prospect of further US rate rises, led to positive investor sentiment towards the life assurance sector. Following post-referendum losses, hopes that the Bank of England (BoE) would follow the US’s lead and raise rates sparked a recovery in the share prices of the sector’s UK-listed players. However, officials at the BoE have hardly taken a hawkish stance on interest rates despite evidence that inflation is seeping into the economy. Low long-term interest rates have been a persistent problem for life assurers, increasing the value of their long-term liabilities and reducing their investment income.

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