Camradata’s latest Insurance CIO whitepaper focuses on the impact of the pandemic and the investment opportunities ahead, as well as the products and services clients want in a post pandemic world.
The whitepaper includes insight from guests at a virtual roundtable hosted by Camradata in September, including representatives from Barings, Muzinich & Co, Payden & Rygel, Canopius, Foresters Friendly Society, PoolRe and Phoenix Group.
Natasha Silva, Managing Director, Client Relations said, “As the world emerges from the Covid-19 pandemic, insurers have their sights set on opportunities further along the risk curve amid improving economic conditions. Previous business models will no longer suffice and given rapid digital transformations, now is the time for insurers to adapt their products and services
Camradata said insurers will need to scrutinise policy and regulation – particularly with the UK’s departure from the EU and the deviation that could follow in a bid to demonstrate the dividends of Brexit. Another key issue is regulation such as Solvency II, the European framework for insurance regulation. The Association of British Insurers (ABI) has welcomed the government’s announcement to reform Solvency II for the sector to maximise its contribution to climate change investment and driving green investment
The pandemic leads to asset allocation changes
Some insurers and reinsurers said they had made major allocation switches last year, fearing the impact of the pandemic.
Ian Coulman CIO of PoolRe said its equity and credit portfolios were cut by 25% in June 2020, and they moved into short-duration gilts instead.
Gareth Russell CIO of Canopius, a speciality lines (re) insurer said that ‘the tough, low-rate environment for sovereign issues and cash rates, alongside extremely tight Investment-Grade credit spreads had inspired a shift of almost 20% of the portfolio into AAA and AA-rated Collateralised Loan Obligations (CLOs).”
For Phoenix Group and Foresters Friendly Society, allocation changes were not so profound. At Phoenix, the focus away from the UK to global assets continued, with a secondary asset allocation trend towards venture capital and private assets. At Foresters Friendly Society, there was a continued move into alternative assets, with allocation to two trade finance funds. They also reduced exposure to equities.
The whitepaper also features two articles from the sponsors offering valuable additional insight. These are:
- Barings: ‘The staying power of commercial mortgage debt’
- Payden & Rygel ‘’FAL – Back to the Future’
For the full report, download the Insurance CIO whitepaper, click here
For more information on CAMRADATA visit www.camradata.com