Global multiline insurers (GMIs) are well placed to withstand sharp swings in interest rates, according to a Standard & Poor’s (S&P) analysis of 15 companies.

The ratings agency tested insurers against movements in interest rates 100 basis points higher and lower than its economists’ base-case scenarios.

“In a word, these insurers passed the stress test,” S&P said. “The ratings on the GMIs currently adequately factor in this level of interest rate risk.”

Companies examined include AIG, Allianz, Generali, MetLife, Tokio Marine and ING.

S&P says companies have been adjusting to low interest rates in the past couple of years by reducing costs and increasing property and casualty rates.

“Their moderately strong to very strong capital adequacy, in our view, as well as their global diversification, are supporting factors.”

A slump in interest rates would cause more problems for life insurers than those focused on property and casualty, the report says.

“Interest rate sensitivity is less pronounced for property and casualty insurers because unrealised losses are less onerous, although investment yields change more rapidly because of shorter durations.”

S&P says companies with a high bias towards property and casualty and a broad geographic reach include Ace, QBE, XL and Tokio Marine.

Product risk is at its highest in Germany – among major regions – but none of the GMIs examined is overly dependent on that market.