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GSAM Insurance Asset Management

Optimism Grows as Expectations Decline

Following several years of benign markets and muted volatility, the dominant concern of insurers remains achieving adequate returns in the persistent, low yield environment. Against this backdrop, we conducted our fifth annual GSAM Insurance Survey with participation from 276 Chief Investment Officers (CIOs) and Chief Financial Officers (CFOs) representing over $7 trillion in global balance sheet assets.

Optimism Grows as Expectations Decline: GSAM Insurance Survey


Some observations based on the survey findings include the following:

  • This year insurers expressed a more optimistic view of investment opportunities compared to last year, but expectations for market returns have diminished. The dominant concern remains achieving adequate returns in the persistent, low yield environment.
  • Inadequate capital is not a concern for the industry, as over 90% of the respondents believe the industry is adequately or over-capitalized. The majority of insurers intend to maintain current levels of portfolio risk, albeit with a modest nod to increasing credit risk and portfolio duration. On a global basis, EMEA-based insurers demonstrated a greater risk appetite, while Asia Pacific insurers exhibited a lean towards reducing equity risk.
  • Insurers seeking to bolster returns are looking to equity assets including private equity and real estate equity; intend to increase allocations to US investment grade corporates; and plan to add less liquid loan asset classes including commercial mortgage loans, middle market loans, and collateralized loan obligations.