Insurance Investors Also Say Low Interest-Rate Regime Drives Them Into Riskier Assets
November 15, 2021–More than one in three insurers now consider environmental changes as “a serious threat” to their investment strategies, according to an annual survey by BlackRock.
BlackRock released the findings of its annual survey today. The asset management firm surveyed 362 insurance company executives located in 26 markets and representing $27 trillion in assets.
Changes in institutional investment impact global markets, which affect the overall global economy as well as individual savings.
Climate Change Exposure
The firm reported that 95 percent of insurers surveyed said they are taking into account the risk of climate change while making investment decisions.
“An overwhelming majority of insurers view climate risk as investment risk, and are positioning portfolios to mitigate the risks and capitalize on the transformational opportunities presented by the transition to a net-zero economy,” said Charles Hatami, a BlackRock executive.
However, geopolitical risks remain a top concern, according to the survey.
Investors, meanwhile, are increasingly pressing corporations to report n their vulnerability to climate risk in their ESG (Environmental, Social, and Governance) reporting.
Cash, Liquidity & Higher Risk
Other significant findings from the annual survey include the following:
- Up to 60 percent of insurance-related asset managers are moving into higher-risk investments over the next two years to seek higher returns. BlackRock says it is the highest level since 2015. Furthermore, they say the “ongoing low interest rate regime” drives them to look for alternatives in the search for income.
- The drive into riskier assets also prompts many of the institutional investors adjust their portfolios into cash and exchange-traded funds. That is because liquidity — the ability to quickly access funds if needed — becomes a higher priority.
Copyright secured by Digiprove © 2021 Patti Mohr