“We have to properly assess developments taking place in the capital markets and in economies in order to avoid risks.”

European interest rates have remained just above the zero percent mark for a number of years. What exactly does this mean for VIG?

The low level of interest rates and yields is primarily a challenge when making new investments and re-investments, particularly investments to meet the guarantee commitments on traditional life insurance and provide an additional return for customers. The “interest rate” for the investment portfolio as a whole does not change suddenly, but instead steadily over time. This applies to the average guarantee interest rate for the insurance portfolio. We give particular importance to making investments that are secure and of a long-term nature, thus ensuring we receive the stable cash flows that are needed. This has been important in the past and will continue to be important in the future – particularly in the low-interest rate environment.

How suitable is VIG’s conservative investment strategy for the current low-interest rate environment?

In my opinion, this is not a question that concerns the current market environment. Our customers expect us to appropriately honour the commitments and promises we have made regardless of the circumstances. Given the possibility of failure, aggressive and potentially uncontrolled or unnecessarily risky strategies are unacceptable – and, due to their volatility, the probability they will fail is also correspondingly high, as the past has repeatedly shown us. VIG’s conservative investment strategy is therefore also suitable for the current low-interest rate environment.

If such conservative investments are made, where do the challenges lie in your job?

Investment risks can occur individually or cumulatively, depending on the particular market environment and macroeconomic changes. Even conservative investment involves certain risks. It is therefore important for us to properly assess developments in the capital markets and in economies in order to avoid risk. It is also important to remain true to our fundamental principles of conservative investment, and to continue consistently following our medium and long-term strategy.