Conning Viewpoint: Five Investment Themes to Help Insurers Navigate Challenges Amid the Shifting Credit Cycle
September 21, 2022
Strong Analytical Skills, Deep Market Experience Aid Tactical Steps to Consider Within an Insurer’s Investment Strategy
HARTFORD, CT – September 21, 2022 –Leading global investment management firm Conning has posted a Viewpoint highlighting five investment themes that insurers may wish to consider in navigating the market environment amid the shifting credit cycle. The ideas reflect the unique needs of insurance portfolios and generally are shorter-term tactical strategies that may fit within an individual insurer’s larger investment strategy.
“Despite the macro uncertainty, Conning believes opportunities can be uncovered by applying strong analytical skills and investment discipline as well as by leveraging our deep experience in managing through market cycles,” said Matt Daly, author and head of the firm’s Corporate and Municipal Teams of credit analysts and traders. “While the months ahead should feature higher volatility, they should also present distinctive opportunities as yields are at some of the highest levels in a decade.”
Conning’s analysis of the fundamental and technical issues highlights the challenges all investors face in seeking the best path forward. Global monetary conditions have tightened, volatility has risen and recession fears are mounting. Yet corporate balance sheets are in fair condition and unemployment is near historic lows. These views guide the firm’s investment themes for insurers to consider.
“Conning sees potential in issuers with durable credit fundamentals that can weather an economic downturn while keeping their credit profiles largely intact,” Daly said. “Additionally, securities that were issued recently when interest rates were lower and credit spreads tighter are now available at a meaningful discount to par. Many may be opportunities for longer-term investors - such as insurers - who can hold them to maturity.”
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Conning (www.conning.com) is a leading investment management firm with almost $191 billion in global assets under management as of June 30, 2022.* 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, 2022, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited (CHL) and Cathay Securities Investment Trust Co., Ltd. (SITE). SITE is a separate entity under Cathay Financial Holdings Co., Ltd which is the ultimate controlling parent of all Conning entities. The CHL CEO sits on the Board of SITE and helps oversee the business
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