PineBridge Investments: Uncharted Territory
September 5 2016
While insurers around the world face a considerable challenge in a negative rate environment, there are potential solutions. Learning from industry experience in Asia markets with prolonged low interest rates will help insurers formulate appropriate investment strategies in their respective markets.
A prolonged period of low interest rates has beset insurance companies for more than a decade. Now, the adoption of negative interest rates by
a number of central banks in Europe as well as Japan is steering the industry into uncharted territory.
Traditionally, local government bonds are one of the major asset classes life insurers use for asset-liability management. But the new era of negative rates means that traditional approaches will struggle to help insurers meet their return requirements. This, plus the relatively small size of the local corporate bond markets, leaves insurance companies with limited options.
While insurers are facing a considerable challenge, they are not empty handed. The continual fall in yields has given them an incentive to take offshore credit risk for yield enhancement as well as diversification. But it’s important to realize that there is no one perfect solution; each insurer needs to determine the best asset allocation strategy to address the “negative world order.”
-
SIRC: Distinct reinsurance solutions are emerging to address emerging capital strategies: Guy Carpenter
- November 4
As insurers improve their understanding of the risks they are carrying and capital productivity, structured reinsurance and alternative sources of reinsurance capital are being increasingly considered, Guy Carpenter’s Justin Ward says.
-
QBE’s Hammond on transformation and growth
- July 2
The Asia chief executive discusses Covid-19, going digital and restructuring.
-
Swiss Re: Nat cats and man-made disasters in 2018
- April 10
Climate change, increased urbanisation and a growing concentration of assets were on the risk agenda for 2018.
-
Willis Towers Watson: 2019 Asia Market Report
- March 19
Economic uncertainty, more complex risks and tighter underwriting are all influencing Asia's markets.
-
Sedgwick | Investing in people is shaping the future of loss adjusting in Asia
Sedgwick Asia says it is ready to meet the evolving challenges of Asia’s dynamic insurance markets.
-
PartnerRe | Understanding ageing in APAC: why perception, planning and protection don’t always align
Ageing is shaping finances, family dynamics and insurance needs of the caregiving ecosystem, but current product propositions and underwriting frameworks are not keeping pace with protection needs, finds PartnerRe survey.
-
BHSI | D&O in Asia in 2026: navigating geopolitics, insolvencies, and digital crackdowns without breaking the bank
A soft market presents organisations with opportunities to strengthen resilience, although the abundance of capacity is unlikely to persist.
-
QBE | Elevating customer experience, humanising claims: QBE Asia’s ‘Solutions in a Box’
Vastly improving turnaround times and personalising service delivery, QBE Asia’s award-winning, end-to-end bundled claims solutions is a game-changer for the insurance industry.
