Blackrock Survey: What Insurers Are Afraid of and Where They Are Investing | Insurance | 09/28/2022

Investment experts at insurance companies are currently concerned about three main issues: bonds, return opportunities outside of traditional stock markets, and steeply rising prices. This is reported by “Handelsblatt” with reference to a Blackrock survey of 370 managers of global insurers about their investment decisions. The world’s largest asset manager also asked where insurance companies currently view risks.

At the top of the list are the risks stemming from inflation. Geopolitical risks and the Ukraine war, on the other hand, have receded into the background. According to the survey, more than three-quarters (76%) see high inflation rates as the biggest macroeconomic risk in the next 12-24 months, followed by recession risks (46%) and rising interest rates. interest (42%). When it comes to market risks in investment policy, fears of inflation also rank first, closely followed by concerns about high fluctuations in exchange rates and prices on stock exchanges and risks of liquidity.

Old Love Rekindled: Bonds
These evaluations also have an impact on insurers’ investments. According to the newspaper, the main investment strategists in the European insurance industry have become more cautious. Only 17 percent want to take greater risks, in 2021 it was 54 percent. For this reason and because hikes in key interest rates by central banks make interest-bearing securities more attractive again, they are increasingly trusted by professional investors again: Blackrock’s survey showed that 46% of managers in Europe want to invest more in government bonds. – in 2021 it was only 17 percent. Green, social or sustainable bonds will be in particular demand over the next year or two, and high yield corporate bonds will also be in the spotlight again.

In private markets, 38 percent of investment decision makers in insurance groups are considering a higher allocation to commodities, according to the business newspaper. Emerging country stocks, private credit funds and company investments through private equity funds are also very popular around the world. 15 percent of those surveyed even want to invest more in cryptocurrencies. Index Funds (ETFs) will also be used more intensively in the coming months, on the one hand due to liquidity advantages and on the other hand due to return prospects. (jb)

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