Property & casualty insurers could see a drop in the value of their fixed-income securities investments if interest rates climb as expected, according to Moody's Investors Service.

The ratings agency says that about two-thirds of the industry's $1.3 trillion invested assets is in fixed-income securities. Most of these are “conservatively positioned” in U.S. government and agency securities, high-quality municipal bonds, and investment-grade corporations.

While this investment strategy “served insurers well in recent years,” Moody's says, interest rates are expected to increase—impacting the value of the bonds.

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