Insurance Fixed Income Outlook: Transition to more liquid assets

European Insurance companies started 2023 with high solvency ratios and a good outlook to improve their underlying profitability thanks to strong rate increases in reinsurance, and commercial P&C, while 2022 prices increases in retail P&C are slowly mitigating inflation. 


Besides, companies have good prospects of improving further their recurring investment income, with Q4 2022 reinvestment rates being much higher than FY 2022. Arguably, the insurance sector is also facing several headwinds, some of which are just a continuation of 2022 themes. This is impacting several dimensions – be it on the assets or the liabilities side.

In this Insurance Fixed Income Outlook, we focus mainly on the asset side of the equation, looking at how insurance entities have begun to adapt to this new environment and suggesting some avenues to explore for the years to come.

”Lapse risk has been a big topic in recent weeks notably in the wake of Silicon Valley Bank (SVB), Credit Suisse (CS) and Euro Vita stories. Even if those events can be seen as specific, this situation has led to the emergence of several interrogations in the market.”

You can now read the full whitepaper at the link below