|Copyright:||(c) 2010 A.M. Best Company, Inc.|
|Source:||A.M. Best Company, Inc.|
In its annual report on
According to the CEA, European insurers’ total investment in the global economy rose more than 8% to
But the good news on the investment front isn’t assured.
“The financial crisis has created a new, challenging environment for insurance investment managers,” said
Add to this changes in regulatory standards such as mark-to-market accounting and higher risk charges on some asset classes, and insurers could be forced to invest more in low-risk, low-return assets, said
Life insurers alone held
The financial crisis has changed the strategies of insurers on investments.
Emerging markets are increasingly becoming a destination for investment funds, because they promise more robust growth. Also, inflation risk is pushing insurers to invest in commodities, real estate and inflation-indexed bonds.
Insurers are also turning to third-party asset managers for help in managing their asset portfolios.
Overall, it appears the investment front will continue to pressure insurers in terms of underwriting risk decisions and pricing, leading to a further squeeze on sales as buyers also pull back their spending.