The Fed’s hawkish tilt, with interest rate hikes in the offing, bodes well for insurance companies because higher interest rates will help them to generate better revenues. Higher bond yields increase risk-free returns, thus benefiting insurance companies, which invest in them to meet their promised returns to policyholders.
U.S. Treasury bond yields have been on the rise since the start of the year, but the benchmark 10-year rate jumped 12 basis points to about 2.05% on Feb. 10, 2022. It breached the 2% level for the first time since August 2019.
