Tue, Sep 23, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Fitch: U.S. P&C insurers’ investing in alternatives set to increase

Friday, July 19, 2013

Benedicte Gravrand, Opalesque Geneva:

According to a new special report by Fitch Ratings, U.S. property and casualty insurers are investing in alternatives, including hedge funds and private equity, for diversification and higher returns in their portfolios. And this allocation could increase going forward.

Fitch reviewed the property and casualty (P&C) industry's investments in alternative and other invested assets at year-end 2012, by going through the Schedule BA of U.S. statutory financial statements on 50 P&C groups with the largest holdings of these asset classes. By the end of the year, the P&C industry had invested 8% of its portfolios in alternatives, 70% in fixed income and 14% in common equities.

"Analyzing industry long run statutory total investment returns for different asset classes reveals that alternative investments generated significantly higher returns with lower volatility compared with unaffiliated common equities for the period 2008-2012 and 1996-2012," the Fitch statement says.

But as portfolio yields are declining at a time of low interest rates, the insurers could possibly increase the allocation to riskier asset classes to improve returns. Growth in unaffiliated alternative investments has been relatively modest over the last several years, Fitch notes. This is partly due to alternatives’ lower liquidity levels.

"G......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali