A.M. BestTV: European Insurers Sharpen Focus on Investment Growth, Says A.M. Best Financial Analyst

OLDWICK, N.J.--()--In this A.M.BestTV episode, Thomas Bateman, financial analyst, A.M. Best, said an examination of 500 Northern and Western European insurers' assets showed a slight shift toward higher returns from fixed-income assets, with many maintaining a relatively strong level of capitalization. Click on http://www.ambest.com/v.asp?v=europeaneconomictrends618 to view the entire program.

“The largest 500 Northern and Western European insurance companies have a combined asset base of around €8 trillion,” said Bateman. “A.M. Best has witnessed the shift of approximately 2%-3% of that moving to quoted equity from fixed income investments. There has also been an increase in alternative or other investment classes. Investment managers are looking for yields on that invested asset base.”

Bateman said that there is a two-fold reason for this shift in asset allocation.

“First, there are rising asset valuations that contribute to higher allocation to equity. The other point is a small shift between those asset classes as insurers and pension funds, as both groups search for ways to improve their performance and maintain funding levels. One slight offsetting factor is higher bond prices, which have been on a strong upward trend.”

He said he also has seen that, “Pension funds or insurance companies, particularly with longer tail liabilities, have really struggled as result of the low discount factors that they have been using. Corporate earnings have also benefited from cheap financing rates and relatively low-level inflation.”

Recent episodes of A.M.BestTV include:

  • Insurance Adjusters Say a Big Challenge Is Finding Their Own Replacements: At the annual conference of the National Association of Independent Insurance Adjusters, attendees said the sector must emphasize recruiting and internships in order to attract new talent: http://www.ambest.com/v.asp?v=naiia1618.
  • Captive Insurers Wrestle With Relevance, Talent and Regulation: At the Bermuda Captive Conference, attendees said captive organizations are under pressure to keep up with current risks and find professionals able to work in different environments and manage mounting layers of regulation: http://www.ambest.com/v.asp?v=bcc1618.
  • InsurTechs: Not All Insurers Are Ready for New Technology or Even Hungry for Change: At the IASA conference, technology-based companies say their biggest challenges are finding and engaging with insurance companies that have the motivation and resources to leverage new processes and technologies: http://www.ambest.com/v.asp?v=iasa2618.
  • Emerging Demands Reshaping Insurance Chief Financial Officer’s Role, Says IASA Panel: At the Insurance Accounting & Systems Association (IASA) conference, a panel of finance experts said insurance chief financial officers' responsibilities are expanding into areas formerly considered outside their scope: http://www.ambest.com/v.asp?v=iasa3618.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Lee McDonald, +1 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com

Contacts

A.M. Best
Lee McDonald, +1 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com