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46% of insurers, reinsurers get aggressive on investments: Survey

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Nearly half of North American insurers and reinsurers surveyed by Towers Watson & Co. are looking to invest more aggressively over the next year.

Of the 38 insurance and reinsurance executives surveyed online in April and May, 46% intend to set up either slightly or significantly more aggressive investment strategies and 37% intend to increase their allocations to alternatives and other higher-risk, high-yield investment vehicles. Nine percent said they plan to be more conservative.

“It’s meaningful that a substantial number of insurers expect to embrace a more aggressive investment strategy at a time when they are clearly worried about the economy and financial market volatility,” Christopher DeMeo, head of investment for North America at Towers Watson, said in a statement.

Eighty-three percent of insurers and reinsurers see low interest rates as the greatest investment challenge they face, said Michael McNamara, Towers Watson spokesman, in a telephone interview.

Liquidity was most often cited as the primary investment objective among those surveyed, at 28%.

When asked what the key elements they require for investment success, 37% said asset allocation, 26% adequate risk management, 14% good governance, 11% investment diversification, 8% portfolio construction process, and the rest cited costs.

Rob Kozlowski is a reporter for Pensions & Investments, a sister publication of Business Insurance.