Michael Thrasher’s Post

What stress-testing factors should insurance investors be looking at? AMIT AGRAWAL, Head of Fixed Income, AXA XL, gives his views for the next five years and the investment environment - where should insurers be paying attention? "In this environment, you have to make sure that you have stress testers in the portfolio under multiple scenarios," he said. "We also saw, during the summer months, the correlation between bonds and stocks, which were moving in tandem, so you feel as though everything is happening at the same time – which means you want to ensure you have enough liquidity and resources." #investments #insurance #insuranceassetmanagement #liquidity #stresstesting Read more here 👇

Understanding the mutually beneficial relationship between insurance companies and private credit is crucial to averting misdirected regulatory changes. Jiri Krol’s monthly Private Debt Investor column takes a closer look at this relationship and its important place in the future growth of the asset class.   Read the full article today at: https://lnkd.in/ebB-TQQ9 #privatecredit #insurance #alternativeinvestments

KKR in its latest survey of insurance CIOs found that most name private credit as their top choice for future allocations. Commitments to structured credit instruments including CLO debt and asset-based finance increased the most among alternative asset classes, from 5.9% of portfolios in 2017 to 8.3% in 2024. More details on their findings here: https://lnkd.in/guB_2t9E

Insurers are postponing a pivot toward longer-duration fixed-income securities and instead opting for shorter-term bonds, said Tim Zawacki, principal research analyst for S&P Global Market Intelligence. #insurancenews #PandCinsurance #insuranceindustry #financialnews #businessnews #insurance

Private equity's growing influence in the insurance sector is transforming the industry, but it brings significant risks that demand regulatory attention. The Bank of England's Financial Stability Report outlines critical vulnerabilities, including solvency challenges and the risk of 'fire sales' in times of stress. From a legal perspective, enhanced disclosure requirements are paramount to mitigating these risks. Regulators must prioritize transparency in PE-backed insurance transactions to safeguard policyholder confidence and ensure compliance with solvency standards. A proactive legal framework can strike the necessary balance between innovation and systemic stability. Learn more below:

What to make of a return to normal volatility in the fixed income market Robert G. Absey, Head of Insurance Solutions, Allspring Global Investments, discusses how to take advantage of the return to normal levels of volatility in the fixed income market. "We're coming out of an environment where we've been at a zero-interest rate policy for a very long time," he said. "That has been challenging for insurance investors, especially as many have a focus on income with investment income being a meaningful component of their overall business. Low persistent yields on new investments provided a challenge." #fixedincome #investment #insurance #marketvolatility #investmentincome #interestrates Read more of his thoughts here 👇

Ares Management Corporation recently released an article, "An Alternative to Banking-as-Usual," sharing insights on why alternative credit and annuity insurance partnerships may be a natural fit for long-term value. According to Ares, this model allows insurance companies to leverage structured, illiquid assets to create well-matched, high-quality portfolios with fewer risks than traditional liquid bonds. By moving away from typical banking structures, annuity providers can potentially enhance long-term performance, offering higher yields for policyholders and better risk management. Read more in "An Alternative to Banking-as-Usual" - https://hubs.la/Q02Wk2vR0 #InsuranceAUM #Annuities #AlternativeCredit

Contrasts in regulatory framework and practices across jurisdictions like Bermuda, Europe and the US can lead to differences in the notching relationship between Insurer Financial Strength (IFS) ratings, holding company Issuer Default Ratings (IDRs) and individual securities ratings within an insurance group. A new #FitchRatings report addresses several questions frequently posed by investors regarding the application of insurance rating criteria across markets. Read it here: https://ow.ly/SoQq50Rmjsy #Insurance #Regulation

In a commentary this week, Fitch Ratings said the credit impact of private ownership on an insurer hinges on the owner’s strategy, including influence on the insurer’s business plans, investments, capital management and dividends. Read the article for more: https://ow.ly/RS6a50QGEbp #Bermuda #Insurance #Reinsurance

The picture of frogs getting boiled has been discussed extensively over the last days. Here is the article. #sundayread