The Interest Rate Assumption and the Maturity Structure of the Assets of a Life Insurance Company

Interest rates are now at historically high levels, and, as a result, the range of interest rates that responsible actuaries are assuming for the future has widened dramatically. Ten years ago an assumption of 4.5 per cent for nonparticipating rate calculations was a average high assumption compared with the previous twenty-five years' earnings. The same 4.5 per cent is now deemed by many to be the lowest level to which rates might fall in the foreseeable future.