Insurers Trim Hedge Fund Holdings – AIG Cuts A Third – According to AM Best

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By Jason Hopper, Associate Director – Industry Research and Analytics at A.M. Best   The U.S. insurance industry continued to reduce its risk appetite for hedge fund investments, as holdings declined year over year by 8.5% to $16.4 billion from $17.9 billion in 2016, according to a new A.M. Best report based on year-end 2017 data from the National Association of […] Read more »

Insurers Continued to Pull Away from Hedge Funds in 2016

From Jason Hopper and Dan Heitlinger of A.M.Best   Our November 2016 report, “Hedge Fund Performance Has Insurers Reducing Exposure,” noted rising investor concerns surrounding the performance of hedge funds and the insurance industry’s exposure to this asset class from 2013-2015. Based on 2016 data from year-end NAIC statutory financial statements, the insurance industry has continued pulling back its investment […] Read more »

Hedge Fund Performance Has Insurers Reducing Exposure Says AM Best

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By Jason Hopper and Ken Johnson of A.M. Best With interest rates remaining persistently low, NAIC Schedule BA assets, which include alternative investment securities, have generally provided insurers with the potential for higher risk-adjusted returns to help mitigate the decline in higher portfolio book yields. Without a meaningful increase in interest rates, insurers have limited choices for investing new dollars from […] Read more »

A.M. Best Comments on Insurers’ Hedge Fund Activity: Road Ahead Looks Rocky

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By Ken Johnson, CFA, CAIA, FRM, Vice President, A.M. Best.   Headlines reflecting the recent underperformance from the hedge fund industry have caused insurers to rethink their current investment allocations, and whether or not to add allocations to this non-traditional asset class going forward.  However, the ongoing low interest rate environment and more recent equity volatility have […] Read more »

Top 10 Trends in Insurance for 2016

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From Aite Group   Though the U.S. insurance industry is entering 2016 well capitalized and profitable, too much capital capacity does not bode well for pricing as new capital flows in, seeking opportunities and driving pricing competition. Against this backdrop, insurers will be juggling priorities: modernizing their core systems, maintaining profitability within existing portfolios, accelerating […] Read more »