International Monetary Fund (IMF) said in its global financial stability report published on April 4, that insurers could present a systemic risk due to their tendency to invest risky assets in an environment characterized by weak interest rates.

“Across advanced economies the contribution of life insurers to system risk has increased in recent years,” IMF said noting that insurers now invest in assets similar to those targeted by other actors of the financial system therefore taking much more risks in order to compensate for weak interest rates.

IMF said it is preoccupied by the behavior of smallest and weakest insurers, who are those that took the most risks in their investments as they were trying to consolidate. According to experts from the fund, these small firms could indeed present a systemic risk if they move together. Thus, IMF no more really worries about insurers being too big to fail but rather them being too many to fail.

Those behind the report however note that the systemic risk to insurers “clearly remains below that of banks’”. They suggested in this regard that regulators subject insurers to stress testing, and not care only about insurers’ solidity, individually and as a group.

Assets of the global insurance industry are estimated at $24,000.