(April 3, 2013) — After suffering several years of poor investment performance, the outlook for insurers does not look bright, ING Investment Management (IM) has claimed.
A survey of active fund managers and intermediaries by the European asset manager showed 67% of respondents believed these poor returns would be sustained or even drop further over the next 12 months.
Because of this underperformance, asset allocators inside these large capital pools have been increasingly looking towards alternatives to traditional investment classes, Jelle van der Giessen, deputy CIO at ING IM, said.
The company’s research found 49% of respondents said insurance investors had increased their exposure to new asset classes over the past 12 months, to include infrastructure and lending to commercial property firms.
Over the next three years, 77% of respondents said they expected to see more movement in this direction.
“The trend within the European insurance sector over the past few years already shows some evidence of insurers searching for yield enhancement by increasing their investment exposures to infrastructure and mortgage loans [as an] alternative to both equities and corporate bonds,” said van der Giessen. “In particular life companies that need to match long duration liabilities have shifted their asset allocations towards these new asset classes and we believe this is a trend set to continue.”
To capitalise on this movement within the sector, ING IM is to expand its offering to insurance investors, the company announced today.
New investment classes, including senior bank loans, infrastructure debt and areas of trade finance.
In 2011, global insurance assets hit $24.6 trillion, just behind mutual funds with $24.7 trillion and pension assets with $29.9 trillion, according to data monitor TheCityUK.
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