Life-Annuity Liabilities - Growing Interest in a New Asset Class
Conning: Life Insurers’ Focus on Core Business Driving Liability Platform Market Growth, Led by the Annuity Market
- Liability platforms are being funded by the increasing supplies of capital seeking alternative investments.
HARTFORD, CT – March 17, 2020 – The number of life-annuity insurers that focus on acquiring and managing liabilities has increased significantly since 2014, according to a new study by Conning.
“The trend of focusing on core businesses has led insurers to close companies and lines of business,” said Scott Hawkins, a Director, Insurance Research at Conning. “This has led to an increase in supply of liabilities needing a new home, and supported by a growing external capital base, newly created liability platforms in the U.S., EU, and the Caribbean are providing that home.”
The Conning study, “Life-Annuity Liabilities: Growing Interest in a New Asset Class” examines the business model development, financial performance, the role of reinsurers, and growth potential. The report includes the sizing of the life-annuity liability market and the performance and profitability of these liability platforms.
“The outlook is that the supply of liabilities is likely to remain.” said Steve Webersen, Head of Insurance Research at Conning. “Premium growth for life-annuity insurers will struggle, as well as pressure on investment margins from the current low rate environment, continued regulatory burdens, and operating returns remaining under pressure will all be drivers for the supply of liability capital. Looking ahead, there is likely to be continued opportunity for liability platforms to both originate and consolidate liabilities. The challenge for many of these platforms will be how they will perform during an economic downturn.”
“Life-Annuity Liabilities: Growing Interest in a New Asset Class” is available for purchase from Conning by calling (888) 707-1177 or by visiting www.conningresearch.com.
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Conning (www.conning.com) is a leading investment management firm with a long history of serving the insurance industry. Conning supports institutional investors, including pension plans, with investment solutions and asset management offerings, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
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