This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Property & Casualty Insurers Say A Delicate Balance Is Essential For Targeting Higher Returns And Maintaining Suitable Levels Of Risk

Property & casualty (P&C) insurers say that principal preservation and total return are the most important objectives of their companies’ portfolio management, yet when asked about their satisfaction level with these two investment goals, their responses diverged. Three-quarters of the participants in a new Property & Casualty Insurance CFO Survey said principal preservation is the most important objective for their companies, and equal percentages are very satisfied with the outcome. Total return is ranked most important by 69% of the CFOs; however, only 23% are very satisfied with it.

The survey, which examines CFO perspectives on investment strategies, was conducted by global professional services company Towers Watson (NYSE, NASDAQ: TW). Liquidity and the ability to pay claims registered third among CFOs’ overall objectives, with a 63% response rate — and scored high in satisfaction, as 85% are very satisfied with how their companies met this objective.

“CFOs with P&C insurers are facing current investment challenges, which are inherent to their dual requirements of ensuring that their companies withstand today’s adverse market conditions while still meeting the expectations of rating agencies and regulators. The responses from our survey illustrate that capital appreciation and investment income aren’t sufficiently contributing to P&C insurance company returns levels needed to adequately please their investors,” said Stuart Hayes, senior consultant, Towers Watson.

According to the survey, almost one-third of respondents (31%) expect their companies’ investment strategies to become slightly more aggressive in the coming year, yet none say they anticipate taking on a significantly more aggressive investment posture. Hayes added, “The more assertive investment posture reflects a low interest rate environment that necessitates slightly more risk taking to improve portfolio returns.”

CFOs expressed satisfaction with their companies’ approach to investment policies. Over three-quarters (78%) said they are very satisfied with their companies’ investment management governance. Similarly, CFOs conveyed that adequate risk controls such as asset/liability management and liquidity are in place, with 75% revealing they are very satisfied. “With the confluence of the financial crisis and the resulting investment environment combined with the push on ERM – risk controls and policies will continue to be important as companies effectively manage risk in the future.,” said Hayes.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,790.19 +13.76 0.08%
S&P 500 1,979.92 -7.13 -0.36%
NASDAQ 4,748.3610 -32.9030 -0.69%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs