Seven predictions for the insurance industry

As financial markets and monetary policy continue along the slow march to normalization in the post-crisis world, many unique challenges await insurers. Low, but rising, rates in much of the world threaten income prospects, pressure to enhance shareholder value has put profitability under a microscope, and sweeping new regulations are forcing changes to business strategy and investment policy.

In order to help our insurance clients adapt and meet these challenges, BlackRock has prepared its second annual Insurance Industry Outlook, which captures our highest-conviction thinking for the year ahead. We have also shone a critical light on last year’s Outlook, in order to see what we got right, where we were off-base, and what we learned in the process.

Our predictions for the year ahead include:

  • Interest rates will likely remain low for longer, leading insurers to increase the flexibility of their fixed income allocations.
  • Disintermediation in the lending markets may present new opportunities to earn attractive risk-adjusted returns.
  • The shifting regulatory landscape will likely affect both capital deployment and asset allocation.
"As your investment partner, our aim is to help you maximize your investment income, achieve your profitability targets and stay ahead of the changing regulatory landscape."

- David Lomas, Global Head of BlackRock's Financial Institutions Group

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