Life Insurance Industry Investments: Added Risk in 2013


Michael Warner
Conning, Inc.

Conning—Life Insurance Industry Increasing Credit Risk

(Hartford, CT) November 5, 2014—The life insurance industry continues to reshape its investment portfolio in response to the extended low interest rate environment, according to a new study by Conning.

“Conning’s analysis of 2013 life industry investments confirm that insurers have responded to the continued low interest rate environment by adding credit risk to their portfolios,” said Mary Pat Campbell, analyst at Conning. “The spread between industry book yields and reference rates has been widening since 2009, which we believe reflects the increasing risk within the industry portfolio. Despite insurer movements, gross total returns for the industry turned negative in 2013, driven largely by interest rate movements.”

The Conning study, “Life Insurance Industry Investments: Added Risk in 2013” analyzes life industry investments for the period 2009-2013 for the industry as a whole, by insurer size, and for five peer groups. The study combines a discussion of strategic issues facing the life insurance industry with a detailed examination of its investment profile.

“The industry’s quest for yield began in 2010 and has only increased in 2013,” said Steve Webersen, director of research at Conning. “The largest shifts have included greater allocation to NAIC-2 rated securities and to private placement bonds, and insurers are not dissuaded by the risk-reward tradeoff so far. That said, investment strategies differ greatly for different sized firms, and our analysis shows that the larger insurers are more focused on higher-risk assets generally.”

“Life Insurance Industry Investments: Added Risk in 2013” is available for purchase from Conning by calling (888) 707-1177 or by visiting the company’s web site at

About Conning

Conning ( is a leading investment management company for the global insurance industry, with almost $92 billion in assets under management as of September 30, 2014 through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, and Goodwin Capital Advisers, Inc. Conning’s unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning is focused on the future, providing clients with innovative solutions, leveraging its global capabilities, investment experience, and proprietary research. Conning is headquartered in Hartford, Connecticut, with additional offices in New York, London, Cologne, and Hong Kong.