Hiscox records lowest ever fixed income investment yields

Written by Adam Cadle

03/08/2020

The yield to maturity on Hiscox’s fixed income portfolio is now at its lowest ever point at less than 1%, thus serving to reduce future expected returns.

According to the insurer's latest financial results, the investment return for the first six months of 2020 is $84.6m (2019: $147.5m), 2.5% (2019: 4.8%) net of fees. Assets under management at 30 June 2020 were $7,467m (2019: $6,592m).

“On the back of unprecedented support from central banks and fiscal policymakers, financial markets recovered significantly in the second quarter, and as such our mid-year investment return has improved materially from the first quarter,” the insurer said.

“Our cautious risk positioning ahead of the pandemic enabled us to take advantage of market uncertainty by topping up our allocation to risk assets through March and April. Incremental increases to our holdings in equities, high yield debt and emerging market debt have all performed well in the recent market rally, and have made good contributions to year-to-date returns. With US one to three-year investment grade credit spreads having already retraced much of their widening in the first quarter by the end of June, we are comfortable to maintain our current level of risk at this juncture.”

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