INSURERS LOOK TO ILS INVESTMENTS AS LOW YIELDS CONTINUE TO BITE

Nearly one out of five re/insurers invests in insurance-linked securities (ILS), a survey by asset manager Natixis has found. The survey indicated one in 10 firms are planning to increase their investment allocation to ILS instruments in the next three years. The study examined what is driving the investment strategies of insurers and reinsurer. It surveyed 200 chief investment officers (CIOs) and investment teams of life, property and casualty insurers and reinsurers. The survey found a decade on from the financial crisis, low interest rates are still creating challenges for investment teams as they look to make up ground in a perpetual low-yield environment. As a result, insurers and reinsurers are increasingly turning to alternative and private assets such as ILS to add yield. Three-quarters (75%) of respondents said it is vital to invest in alternative asset classes to diversify their portfolio risk and seek returns that are less correlated.