We believe Europe will continue to be a major influence on insurance fixed income portfolios.
European insurers face a number of challenges in 2012 and beyond. After years of low investment yields they are looking for attractive sources of income and return. They continue to face headwinds from the European debt crisis and heightened concentration risk from benchmarks exposed to financials and peripheral European sovereign debt.
The events of recent years have also highlighted the difficulty in achieving sufficient diversification in highly correlated global markets. In addition, new regulatory requirements under Solvency II and related equivalents will have a dramatic impact on capital management and investment policy.
Insurers have been exploring new strategies as they look beyond traditional fixed income portfolio management to address these changing market dynamics and the significant scrutiny of their balance sheets as a substantial source of risk. Here, we present a framework that highlights today’s challenges and discusses how European insurers can more effi ciently manage their asset portfolios and reduce balance sheet risks.
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Goldman Sachs, share buy backs, investment services, insurers