03 Enhancing portfolio flexibility to promote resilience
Circa 60% look to combine a focus on quality with higher diversification, and increased portfolio flexibility with strong governance.
Risk appetite is remarkably robust with 47% wanting to increase risk exposure. Insurers view geopolitical risk and weak global economic growth as the most serious macro risks, while asset price volatility and liquidity risk are considered to be the major market risks.
Strengthening credit quality and diversification have been the biggest adjustments to investment strategies following the crisis. Insurers intend to increase cash holdings at the expense of public market allocations, but target exposures to multi-alternatives and select private market investments. They have to balance these exposures with liquidity concerns and a desire for greater resilience.
Repositioning for prolonged low rates
Q: What steps have you taken in the past 12 months to position for a prolonged period of low interest rates?