Solvency II: Insurers seek bond diversity and tactical allocation

Family_insuranceInsurers are looking to diversify their fixed income portfolios to deal with low rates, a survey found, reflecting a trend of recent years. Axa Investment Managers surveyed 122 insurance companies and found 36% wanted fixed income diversification and 38% would use more tactical asset allocation. The asset manager said that low rates and regulation remained the two most important challenges that insurers faced with regards to their investment portfolio. However, the largest cohort responding to the survey (59%) said they expected to use more alternatives to address yield challenges. Nearly 40% of respondents cited “outsourcing a greater proportion of the portfolio” as a direct impact of the Solvency II regulation on their investments. Similarly, 53% said that they did not expect to see a reduction in the number of external managers they used for their portfolios as a consequence of Solvency II. Cerruli Associates recently said a lack of understanding of insurers’ needs was holding up outsourcing. Bettina Ducat, global product head at Axa IM, said the firm was seeing demand from insurers for less liquid strategies. “Senior loans, private debt strategies and real assets thematics like infrastructure debt and real estate debt are proving popular as a way to capture extra yield,” Ducat said. The demand for illiquid strategies and alternatives echoes another survey finding that the majority of insurers (56%) were not moving towards passive investment to deal with Solvency II. ©2017 funds europe

Sponsored Profiles

SPONSORED FEATURE: Investing for income

May 17, 2017

Portfolio Manager Thomas Kruse examines the findings from Pioneer Investments’ survey on income investing and outlines ways of achieving a target income.

SPONSORED ARTICLE: A radical solution to KYC concerns

May 17, 2017

The 1MDB affair shows that lax know-your-customer and due-diligence procedures are a major risk, says Paolo Brignardello, head of product management and marketing, Fundsquare. New solutions are...

SPONSORED FEATURE: AIFMD - What does Brexit mean?

Apr 18, 2017

An open discussion between funds industry experts and initiated by SGG Luxembourg took place in London to examine  the implications of Brexit for UK fund managers marketing to the EU.

SPONSORED FEATURE: Luxembourg fund reporting – CRS vs FATCA

Apr 18, 2017

Luxembourg funds need clear procedures for CRS compliance, writes Andrew Knight, Partner at M Partners, a member of the Maitland network of law firms.

Executive Interviews

INTERVIEW: Finding managers that can (and do)

Apr 18, 2017

Fabrice Kremer, a fund selector at Banque de Luxembourg Investments, has berated fundamental managers for failing to beat indices, but he remains committed to active funds. He speaks to Nick...

JERSEY INTERVIEW: ‘A steady sort of place’

Mar 21, 2017

The chief executive of Jersey Finance is keen to portray the island as a stable, trustworthy jurisdiction. He talks to George Mitton.

Roundtables

MARKETING & BRANDING ROUNDTABLE: It’s about aspiration

May 17, 2017

With such an intangible product, it can be hard for asset managers to communicate what they do. Having personality and connecting with customer aspirations may be the key, our branding roundtable hears.

ROUNDTABLE: The issue is perception

Mar 21, 2017

Our panel discuss tax transparency, the elegance of private placement and why Jersey could do more to promote itself. Chaired by Tom Cowsill in Saint Helier.