Conning Viewpoint Offers Insurers a Primer on Alternative Investment Strategies
August 30, 2021
Alignment With an Insurer's Strategic Asset Allocation is Essential
HARTFORD, CT – August 30, 2021 –Leading global investment management firm Conning has posted a Viewpoint that helps insurers understand what to consider when adding alternative investment strategies, or “alts,” to their portfolios.
In “Alternative Paths: Alt Assets May Offer Insurers Greater Yields, Returns and Risk Management,” author Rich Sega, Conning’s Global Chief Investment Strategist, notes that insurers’ portfolio income has been challenged by the ongoing low interest rate environment. Alts may offer a solution, he said, but for many insurers alts may be less familiar territory.
“There are many forms of alts spread across the investment landscape,” Sega said. “Some fit the perception of alts as being further out on the risk curve but incorporating alts may help reduce portfolio risk.” Conning believes alts “may offer insurers a greater menu of investment choices to help further diversify a portfolio, generate greater yield and return, and improve downside protection,” he added.
Ensuring that a new asset class fits within an insurer’s investment strategy and objectives is the most important consideration, Sega noted. A Strategic Asset Allocation (SAA) analysis can help insurers assess the opportunity to add alts to their portfolios. In addition, insurers may need help in evaluating and managing an alts strategy as well as in educating board members, but the long-term rewards may be worth the effort. As Sega concluded, even if yields improve at some point, “the potential benefits of an expanded investible universe may be too good to walk away from in the future.”
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Conning (www.conning.com) is a leading investment management firm with more than $207 billion in global assets under management as of June 30, 2021.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
*As of June 30, 2021, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited and Cathay Securities Investment Trust Co., Ltd. (“SITE”). SITE reports internally into Conning Asia Pacific Limited but is a separate legal entity under Cathay Financial Holding Co., Ltd. which is the ultimate controlling parent of all Conning Holdings Limited controlled entities.
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