- The near-term investment outlook is bleak, with most insurers anticipating investment opportunities will deteriorate or remain the same in the next year.
- The sovereign debt crisis in Europe remains the predominant macroeconomic risk that concerns insurers.
- Insurers consider the prolonged low-yield environment to be the greatest investment risk to their portfolios, resulting in increased interest in higher-yielding asset classes.
- Globally, 26% of insurers expect to increase overall investment risk, while 14% expect to reduce risk. Increased diversification and better risk management systems should mitigate the impact of higher risk investment strategies. Insurers intend to increase allocations to high yield (36%), US investment grade corporates (35%), real estate (34%), emerging market debt (31%), private equity (27%), bank loans (25%) and mezzanine debt (23%).
- The most significant portfolio reductions are planned for cash/short-term instruments (39%) and European financial credit (24%).
- Over a quarter of respondents in the Americas and EMEA anticipate that deflation will be a concern in the next year. More than half of respondents across all markets expect inflation risk will be a concern in the next 2-3 years.
GSAM Insurance Asset Management manages $125 billion in insurance assets as of June 30, 2012 and is ranked among the top 10 insurance asset managers worldwide (based on insurance assets as of year-end 2011; source: Insurance Asset Manager). The group has more than 50 dedicated professionals focused on client relationship management, fixed income portfolio management, insurance advisory services and accounting policy. GSAM’s insurance capabilities include partial to full outsourcing solutions involving traditional fixed income strategies, alternative investments and equities. The group also offers a suite of advisory services including asset liability management, strategic asset allocation, capital-efficient investment strategies and risk management.Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which manages $836 billion as of June 30, 2012. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. 1 These findings represent an aggregation of responses from respondents of the GSAM Insurance Asset Management Insurance CIO Survey and does not reflect or represent the views or opinions of Goldman Sachs. 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Further information concerning relationships between GSAM LP and its affiliates and the investment funds described in this presentation is included in the applicable Canadian private placement offering documents pursuant to which the investment funds may be offered for sale in Canada. This material has been issued for use in or from Hong Kong by Goldman Sachs (Asia) L.L.C, in or from Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), and in or from Korea by Goldman Sachs Asset Management Korea Co. Ltd., in or from Malaysia by Goldman Sachs(Malaysia) Sdn Berhad and in or from India by Goldman Sachs Asset Management (India) Private Limited (GSAM India). This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd. 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