Golden opportunity?


Economic volatility has led investors, including insurers, to consider buying gold as a secure asset. The risk of inflation—prominent in the minds of insurers at present—has often led cash-rich individuals and companies to invest in gold.

However, there are potential pitfalls for any insurers choosing this option.

Through the ages, pure and precious gold has lured and excited multitudes of people and institutions—some to their destruction— but insurance and reinsurance companies have mainly spurned it. However, the enduring popularity of gold as a secure investment could mean that this is set to change.

Milwaukee-based Northwestern Mutual Life Insurance Co., the largest direct provider of individual life insurance in the US, bought gold in 2009 for the first time in the company’s 153-year history. Chief executive officer Edward Zore believes that gold just seems to make sense; “it’s a store of value”, he said during a conference in New York last year, adding that the price could double or even rise fivefold if the economy continues to weaken.

gold, investment, insurers, asset, Northwestern Mutual Life Insurance Co, capital management

Intelligent Insurer