Trade shows need for greater yielding investments
Demand for different investments has been rising within the US life insurance coverage trade during the last yr and a half, in keeping with a report not too long ago revealed by ALIRT Insurance coverage Analysis.
Life insurers have been growing their investments in alternate options, which account for six.3% of complete invested property by the tip of June 2023.
This enhance in demand, ALIRT identified, reveals the trade’s need for greater yielding investments and its elevated consolation coping with the extra advanced investments, equivalent to non-public fairness and hedge funds, that underly the broad asset class.
ALIRT, nevertheless, famous that whereas monetary markets remained unstable within the first half of this yr, insurers have continued so as to add to their holdings of other investments. It additionally predicted that demand for this asset class would stay even amid market volatility and better charges.
The insurance coverage analysis specialist additionally revealed that different investments have grown to 55% of the overall trade surplus by the tip of this yr’s first half.
“As this asset class can exhibit higher volatility in comparison with extra ‘conventional’ investments, the life trade should stay cognizant of the risk-return steadiness of this asset class as combination holdings proceed to rise,” ALIRT stated.
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