News Digest: US insurance expects a deterioration in credit quality
April 7, 2023
Insurance companies representing more than $13 trillion in assets are expecting overall credit quality to deteriorate in the US though such fears have not yet prevented them from moving further towards fixed income and higher risk investments.
In fact, most insurers are actually working on plans to increase their portfolio risk during the next twelve months, a new survey says. In fact, 53% of the respondents said the overall scenario was improving compared to 32% who felt it was unchanged and 15% who expected a slump.
The annual Goldman Sachs Asset Management survey report said 68% of insurers cited increasing yield opportunities in the current environment as a factor driving asset allocation decisions. They expect private equity, private equity secondaries, emerging market equities, cash and short-term instruments, and private corporate debt to have the best returns in 2023.