Insurance Asset Management: Climate Risk and Investment Strategy
Climate Risk, Regulatory Risk, Investment Risk: Implications for Investment Strategy
The insurance industry faces a number of challenges, not least those posed by climate risk, increasing regulation and a low yield environment. The industry needs to adapt to these challenges and also grasp some of the opportunities that new technology and changing demographics will present.
This collection of papers focuses on the implications for insurance asset managers, noting the pressures caused by external forces including climate risk and a changing investment landscape. Potential solutions are suggested, including asset allocation and investment portfolio techniques and strategies.
CLIMATE RISKS AND INSURANCE ASSET MANAGEMENT
A Practical Guide to Climate Change for Life Actuaries (IFoA, 2019)
This guide from the IFoA offers practical suggestions for life insurers and actuaries as they grapple with the potentially significant impacts of climate change on mortality, health, and physical assets.
How European insurance regulators are responding to climate risk (DWS AM, 2020)
For compliance reasons, this paper is only accessible in the EMEA region
DWS AM investigates the responses from European insurance regulators to climate risk. The three channels of climate risk (physical risk, transition risk and liability risks) are now being measured and stress-tested in an attempt to quantify and manage the likely impacts.
Climate risk, insurance and the protection gap (Aviva Investors blog, Feb 2020)
For compliance reasons, this paper is only accessible in certain geographies
Aviva Investors' CEO outlines how the insurance industry is endeavouring to assess and manage the catastrophic risks associated with climate change.
ASSET ALLOCATION AND PORTFOLIO STRATEGIES
Rethinking your insurance portfolio for today's challenges (M&G Investments)
For compliance reasons, this paper is only accessible in certain geographies
M&G Investments investigates how insurance investors can adapt their strategies to confront the challenges they face of lower investment returns and changing business models.
Reintroducing securitisations to insurance portfolios (M&G Investments, 2019)
For compliance reasons, this paper is only accessible in certain geographies
M&G Investments examines how recent changes to regulation via the the 'Simple, Transparent and Standardized' (STS) securitization framework may encourage insurers to revisit the ABS market that they tended to avoid after the introduction of punitive capital charges under Solvency II in 2016.
Generating income in the era of negative bond yields (Manulife IM, Jan 2020)
For compliance reasons, this paper is only accessible in certain geographies
Manulife IM suggests some ways in which beleaguered fixed-income investors might be able to generate income without materially altering a portfolio's risk profile.
Strategic asset allocation for insurers: the Solvency Sharpe Ratio (Neuberger Berman)
For compliance reasons, this paper is only accessible in certain geographies
In their recent report, Neuberger Berman suggests a new approach to Strategic Asset Allocation (SAA) for insurers - the Solvency Sharp Ratio - which may assist in improving portfolio outcomes.
… Or How Insurance Companies Learned to Love Passive Investing (DWS AM, 2019)
DWS Asset Management examines the rapid rise of customized passive mandates - a new form of passive investing, which has started to find its way into insurers' general accounts.
Insurance roadmap: Three keys to success (Wellington Management, Jan 2020)
Wellington Management's Multi-Asset Insurance Strategist outlines his roadmap for insurance clients for 2020 and the coming years. The focus is on three key issues: downside risk mitigation, climate change, and investment-grade bonds.
Long-Term Equity Investments for European Insurers (DWS AM, Jun 2019)
For compliance reasons, this paper is only accessible in certain geographies
New European Commission regulations have resulted in amendments to Solvency II. In particular, a new category known as, "Long-Term Equity investments" has been introduced.
Solvency Regulations and Low-Risk Investing: Comparing the Nordics with the Netherlands (Robeco, 2019)
Robeco investigates how solvency frameworks for both insurance companies and pension funds may encourage risk-taking in equity portfolios.
INSURANCE INDUSTRY OUTLOOK AND OPPORTUNITIES
2020 Global Insurance Outlook (EY, 2019)
EY's annual Global Insurance Outlook paper investigates the key issues likely to be shaping the industry over the next three years, namely low-interest rates and persistent barriers to growth, shifting demographics and rising customer expectations.
2020 Insurance Outlook (Deloitte)
Deloitte's insurance sector outlook focuses upon the key regulatory and other challenges the industry faces in 2020.
The future of Defined Benefit pension schemes in the UK (PPI, 2019)
For compliance reasons, this paper is only accessible in the United Kingdom
Managing the 'end game' for UK DB pension schemes can take a variety of forms, and a section of this report from the Pensions Policy Institute notes several de-risking strategies and solutions, several of which are provided by the insurance industry. Bulk annuity purchases and longevity hedging are a couple of solutions.
UK Risk Transfer Report (Hymans Robertson, 2020)
For compliance reasons, this paper is only accessible in the United Kingdom
Hymans Robertson's report tracks the key changes in the UK bulk annuity market.
AI applications in financial services (Federated Hermes, 2019)
Federated Hermes investigates the risks and opportunities presented by the application of artificial intelligence (AI ) in financial services. A section of the report is devoted to 'Applications in Insurance'.