Regulation deterring 89% of global insurers from investing in higher risk assets

Written by Adam Cadle

25/11/2019

Eight-nine per cent of insurers globally say regulations are deterring them from investing in higher risk assets, according to Natixis Investment Managers.

In a survey of 200 CIOs and investment team members at life, property and casualty, and reinsurance companies in Asia, Europe, and North America, Natixis Investment Managers found that in both Germany and France, some 97% of insurance companies complain that regulation deters them from investing in the alpha-producing assets they need to meet liabilities. This represents significantly more pain than in the 2015 survey when approximately three in five insurers said regulation and capital requirements were frustrating attempts to invest in new and alternative asset classes.

Sixty per cent of insurers worldwide also said that increased capital and valuation requirements are negatively affecting the level of diversification of insurance portfolios.

Forty-three per cent of insurers said regulatory compliance presents implementation cost challenges, 41% technical implementation challenges, 37% capital requirement challenges, 36% data management challenges and 35% implementing changes in risk management.

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