Digital assets major part of insurance investment landscape, industry agrees

Written by Dan McGrath

15/06/2023

One hundred per cent of insurance asset managers interviewed in a survey by Laser Digital have stated that they believe digital assets are a major part of the investment landscape.

The survey by Nomura’s digital asset subsidiary found that all of the 303 insurance asset managers questioned agreed that digital assets represented diversification opportunities to work alongside traditional asset classes such as fixed income, cash, equities and commodities.

The report stated that 86% of those surveyed would like to see digital assets more closely integrated with traditional assets to produce ‘all-weather’ income strategies to help cope with the risk of inflation or debasement risk of fiat currencies.

Laser Digital also found that nearly four in five (79%) of the insurance asset managers interviewed are positive about the digital asset class in general over the next 12 months, particularly Bitcoin and Ethereum, with just 7% saying they have negative feelings about it.

Furthermore, only 14 of the respondents in the survey said that it was important to have the backing of a large traditional financial institution for any digital asset fund or investment vehicle, before they or their clients would consider putting money into it.

The report also highlighted a number of challenges.

The survey found that over half of those interviewed (57%) said that there are legal or regulatory restrictions which apply to them which could prevent the fund or that of their clients’ investing in a product that references exposure to digital assets.

Additionally, 71% said that having to make regulatory filings or notifications as a result of holding or investing in financial instruments focused on digital assets would be an issue, with 79% said they are aware of regulatory filings regulatory filings or notifications that the issuer of financial instruments must make as a result of investors holding or investing in their financial instruments.

CEO of Laser Digital, Jez Mohideen, said: “Our comprehensive study reveals that the majority of institutional investors surveyed saw a clear role for digital assets in the investment management landscape, and the benefits they can bring, such as greater diversification of portfolios.

“For many, their outlook for major digital assets such as Bitcoin and Ethereum is positive, but our study also reveals challenges and hurdles for the market. Many of our survey respondents acknowledged that there are legal and regulatory restrictions that could prevent them from investing in digital assets, and these need to be addressed by the industry in cooperation with regulatory authorities.”

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