Nearly half of North American insurers and reinsurers surveyed by Towers Watson are looking to invest more aggressively over the next year.
Of the 38 insurance and reinsurance executives surveyed online by Towers Watson in April and May, 46% intend to set up either slightly or significantly more aggressive investment strategies and 37% intend to increase their allocations to alternatives and other higher-risk, high-yield investment vehicles. Nine percent said they plan to be more conservative.
“It’s meaningful that a substantial number of insurers expect to embrace a more aggressive investment strategy at a time when they are clearly worried about the economy and financial market volatility,” Christopher DeMeo, head of investment for North America at Towers Watson, said in a news release.
Eighty-three percent of insurers and reinsurers see low interest rates as the greatest investment challenge they face, said Michael McNamara, Towers Watson spokesman, in an interview.
Liquidity was most often cited as the primary investment objective among those surveyed, at 28%.
When asked what the key elements they require for investment success, 37% said asset allocation, 26% adequate risk management, 14% good governance, 11% investment diversification, 8% portfolio construction process, and the rest cited costs.