The Federal Reserve announced in December that it will reduce its bond purchases from $85 billion to $75 billion per month, starting the process of scaling back its massive quantitative easing program. In mid-2013, interest rates headed up as investors anticipated that this tapering would begin soon. Yield on 10-year Treasury notes rose from 1.61 percent in May to as high as 3 percent in September. Most economists agree that the tapering program will continue to drive rates skyward.

Treasury & Risk sat down with Greg Mateja, a managing director with Alvarez & Marsal and a fellow of the Society of Actuaries, to discuss how higher interest rates are likely to affect insurance companies and their customers. What we got was good advice for every company contemplating the different ways in which tapering of the Fed's bond buying might affect their business.

T&R: How will the tapering of the Fed's quantitative easing program affect insurance companies?