Asset Depreciation Risk

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Asset Depreciation Risk

In insurance, the risk of loss to the company as the result of declining investments. An insurance company generally maintains a portfolio of securities. If a stock declines or a bond defaults, it may find itself with fewer assets and the same number of liabilities. In the United States, state governments determine the investments insurance companies are allowed to make to reduce asset depreciation risk. It is one of four types of risk to an insurance company; the others are interest rate risk, pricing inadequacy risk, and general business risk. Asset depreciation risk is also called asset quality risk. See also: Legal list.
References in periodicals archive ?
The upgrade of UB's ratings reflects reduced asset quality risks and vulnerability of the bank's capital position, due to sufficient state support for legacy problem assets and low-to-moderate risks stemming from other exposures.
MEXIM's ba3 stand-alone credit profile remains unchanged because the bank operates with a very strong capital buffer against the backdrop of high asset quality risks.
Kazakh banks' legacy and emerging asset quality risks are consistent with their low Viability Ratings, which reflect weak standalone credit profiles, mostly in the 'b' category.
Summary: , but growing asset quality risks expected down the road
The outlook on the kingdom reflects S&P's view of Bahrain's stable growth, well regulated financial system, and manageable asset quality risks amongst other factors.
While liquidity has improved and capital buffers are strong, these factors are moderated by legacy asset quality risks, primarily related to the ongoing restructuring of some large government-related borrowers.
However, the company's focus on the Danish real estate sector hiking asset quality risks and limiting revenue diversification along with low margins characterising the domestic mortgage market are constraining BRFkredit's ratings, S&P said.
Although asset quality risks remain, we believe 16% D/Y in NBP could attract investor interest.
We upgrade Korea on the basis of valuations, our belief that the asset quality risks are peaking in second quarter, some improvement in loan spreads and the rate hike of last week," said Sanjay Jain, an analyst at Credit Suisse.
We believe that downside asset quality risks for Sberbank are limited and expect its loan impairment charges to stay around 1.
Moody's predicts reduced fiscal spending and currency devaluation that will pose additional asset quality risks as well as funding and liquidity challenges.
The bank's focus on providing housing finance to low-to-middle income individuals exposes it to asset quality risks, especially in light of our expectations that economic growth will remain subdued in 2015.