Spotlights

Outlook 2020

2020 Asia Outlook: Unthreading the Asian patchwork

2020 Asia Outlook: Unthreading the Asian patchwork

Ever a patchwork of underwriting industries, the insurers of Asia will go their own ways when investing in 2020, as demands of performance, new regulation and even mild governmental cajoling come to play in varying degrees in the different jurisdictions. By David Walker

US Outlook 2020: an encore for investors

US Outlook 2020: an encore for investors

Many had bet on the market staging a final whimper last year before recession. But the talk of a global downturn suddenly vanished in the last few months of 2019. Now investors are looking at the market with rosy spectacles and hoping for more rewards in 2020. Sarfraz Thind reports

Capital optimisation

Finding the holy grail

Finding the holy grail

With low interest rates impacting solvency ratios, insurers are looking for the holy grail of high yielding assets which do not require higher capital charges. Vincent Huck reports

The role of investing in capital optimisation

The role of investing in capital optimisation

Insurance companies have traditionally focused most on balance sheet liabilities, with investment assets often overlooked opportunities – strategies now exist that allow insurers to create capital-efficient investment portfolios to enhance yield, improve returns, and optimise capital.

Outsourcing by Insurers

To outsource the CIO, or not?

To outsource the CIO, or not?

While outsourced CIOs have been predominantly used in the pension space up until now, small US insurers are increasingly seeing the benefits of such a move. But insurers' needs differ widely from those of pension funds, and service providers will need to prove their worth to win mandates. Sarfraz Thind reports

Insurance affiliates hold their own at top table of Europe's asset managers

Insurance affiliates hold their own at top table of Europe's asset managers

Many insurers’ affiliated managers have been sent out by their parents to gather third-party assets in recent years – with varying success. The managers might put their affiliation to an underwriting group forward as a credential to win more insurance mandates, but a European CIO questions whether this can be a universal truth. David Walker reports

The days of an easy life for European non-life investment teams are over

The days of an easy life for European non-life investment teams are over

As many non-life insurers come to rely on their investment performance for an ever greater slice of their total profits, or to make up for underwriting losses, investment teams are looking at new asset classes with the help of external managers. Far greater transparency about the insurers' business practices is offering a unique glimpse into what they want and to whom they outsource this key task. David Walker reports

Real Assets

ReinSTSted: Are new rules reopening the ABS market for insurers?

ReinSTSted: Are new rules reopening the ABS market for insurers?

Holding asset-backed securities has been a challenge for most insurers since the dislocations of the global financial crisis and introduction of Solvency II. This year, new regulation offers the potential for Solvency II-regulated firms to return to securitised debt investments, says James King, fund manager at M&G.

What could derail Britain's infrastructure investing boom?

What could derail Britain's infrastructure investing boom?

The UK has for many years been heralded as a treasure trove of investable infrastructure assets. However, as the industry faces potential disruption from renationalisation, regulatory reforms and Brexit, we discuss the risks and rewards of investing in UK infrastructure.

Commercial mortgages close up

Commercial mortgages close up

Strong returns, stable performance, low risk—the market for commercial mortgage loans has run on tailwinds in the last 10 years with more insurers bringing the asset onto their portfolio than ever before. But, with a looming economic downturn, is the love affair with CMLs about to run out? Sarfraz Thind reports

ESG/Sustainable Investing

Japanese insurers get to grips with ESG

Japanese insurers get to grips with ESG

Three major Japanese insurers – Tokio Marine Group, MS&AD Insurance Group, and Nippon Life Insurance – are beginning to integrate climate risks and environmental, social and governance (ESG) factors into their strategies, each with its own focus area. Elena K. Johansson reports.

Climate Change at the crossroads

Climate Change at the crossroads

Matt Christensen, AXA IM’s Head of Responsible Investment, talks about how insurers today are leading the way with smarter investments.

ESG Considerations for the Insurance Industry

ESG Considerations for the Insurance Industry

There are many types of risks insurers must consider, and the environmental, social, and governance (ESG) risks that swarm the industry are no exception. Read our insight to understand why ESG criteria is crucial for the insurance space, and items to consider up front.

Did you say impact?

Did you say impact?

Every investment has an impact, so what is meant by ‘impact investing’ and how can one measure the impact of an investment. Vincent Huck reports on a new measurement framework launched by the University of Cambridge Institute for Sustainability Leadership

2019 Outlook

"The Answer Is Simple: Take Smart Risk"

Lisa Longino, head of insurance asset management at MetLife Investment Management, argues that while it is prudent to keep a close eye on the horizon, uncertainty and volatility create opportunities for investors willing to take smart risks.

Asian equities & ESG outlooks 2019

Asian equities & ESG outlooks 2019

Hilde Jenssen, product manager for fundamental equities at Nordea Asset Management provides a 2019 outlook for equities in the Asian region as well as latest trends in environmental, social and governance factors (ESG). The outlook is based on views from Nordea Asset Management emerging markets portfolio management team.

Outlook 2019: Diversification is the only free lunch left in town

Outlook 2019: Diversification is the only free lunch left in town

Prashant Sharma, head of international fixed income insurance at JP Morgan Asset Management, predicts a slowdown in growth for 2019, but all is not lost for insurers’ assets and a bit of forward thinking and preparation could help the resilience of their investments in the case of a downturn.

Emerging Markets

EM debt - worth a look in the latter stages of the credit cycle?

EM debt - worth a look in the latter stages of the credit cycle?

A market downturn is deemed to have more impact on emerging markets (EM) than on developed economies. It poses the question whether EM debt is a smart investment at this stage of the credit cycle. Ian Coulman, chief investment officer at Pool Re, speaks with Vincent Huck on the topic.

What's behind the wall: US insurers' investments in EM debt

What's behind the wall: US insurers' investments in EM debt

Emerging markets should be an attractive option for US insurers as the Federal Reserve looks to cut rates, making opportunities at home less attractive. But, as the Trump government continues building trade barriers, are US government policies stymying enthusiasm for the asset class? Sarfraz Thind reports

African infrastructure, an asset class underserved by insurers

African infrastructure, an asset class underserved by insurers

Sanjeev Gupta, executive director at Africa Finance Corporation and former CEO of Sanlam Investment Management Emerging Markets operations speaks to Insurance Asset Risk about mitigating risks in African infrastructure investments and why insurers are under-investing in the asset class. Interview by Vincent Huck

Emerging market corporate debt stands alone

Emerging market corporate debt stands alone

Emerging market corporate debt has been a rapidly growing universe over the last 10 years. What might be of surprise is that over 55% of the EM corporate universe is investment grade.

EMD and insurers: strange bedfellows?

EMD and insurers: strange bedfellows?

“Emerging market debt (EMD) is still not seen as a core asset class for many European insurers, due to concerns over its risk/return profile, credit spectrum and market capacity. We believe these concerns are misplaced.”

Climate change increases cost of debt for developing countries

Climate change increases cost of debt for developing countries

The intensification of climate risks and the degree to which they are accurately priced by financial markets are of increasing concern to global economic stability. However, as awareness around those risks has risen over the last years, there is still a long way to go to consistently measure and monitor their costs, which can result in substantial gains or losses for institutional investors. Vincent Huck reports

Technology

Artificial intelligence gets real

Artificial intelligence gets real

In recent investor presentations and earnings calls, we have increasingly come across the terms ‘artificial intelligence’ (AI) and its terminology bedfellows, ‘machine learning’ (ML) and ‘Big Data’. While companies have addressed these concepts for a few years now, they have taken centre stage in the last 12 months.

How to connect new technologies with strategy

How to connect new technologies with strategy

MetLife's chief digital officer Greg Baxter talks to Paul Walsh about which technologies are his top priorities, how such technologies can be applied to asset liability management in a Solvency II environment and what investments the firm is making in the digital economy.

Private Markets

Private markets: end of the credit cycle, start of a new era?

Private markets: end of the credit cycle, start of a new era?

Insurers have increasingly invested in private assets in recent years to counter the low yield environment. But as we enter the later stages of the credit cycle, questions are being raised on whether private assets were tactical short-term choices, or if insurers have fully embraced these asset classes. Vincent Huck reports

A slow growth for US infrastructure

A slow growth for US infrastructure

A US infrastructure overhaul is due—that much is common knowledge. However, so far, institutional investors and especially insurers have been coy to invest due to policy hurdles at the federal level. As each state administration starts to address these issues, insurers are seeing opportunities building up. David Turner reports

Responsible Investing and ESG

The case for ESG

The case for ESG

From the diesel emissions scandal to the perceived exploitation of zero-hour contracts, there have been many examples in recent years of how failures in the way companies are run can have a harmful impact on the environment, society and investor returns.

Why it's time for insurers to embrace ESG investing

Why it's time for insurers to embrace ESG investing

A growing body of evidence suggests that ESG investing fosters better investment decisions, performance and risk management. While insurers lag other institutional investors in embracing ESG investing, momentum is building and things look set to change.

Green Bonds: a primer

Green Bonds: a primer

Insurers are looking more closely than ever at the current trend of green bond investment. But is this just a fashion? And what should investors be aware of when putting money into this still nascent sector? David Turner reports

Real Estate

Build-to-rent: an emerging opportunity?

Build-to-rent: an emerging opportunity?

Within the booming UK real estate industry, where a lack of supply has inflated valuations and rental prices, the build-to-rent sub-sector offers an alternative revenue stream for insurers. Cintia Cheong reports

Building the case for investing in real estate debt

Building the case for investing in real estate debt

Real estate debt can offer a set of outcomes well suited to the needs of insurers, including a solid relative value proposition, stable cashflows, strong investor protections and transparent security against physical underlying assets. John Barakat, head of real estate finance, M&G Investments explains

Urban logistics:

Urban logistics: "the hottest game in town"

The projected growth of e-commerce and urbanisation has seen real estate investors showing increasing interest in urban logistic centres. Paul Walsh explores the nascent asset class as an opportunity for insurers.