Investors continue to enjoy the longest bull run in history despite interest rates in developed markets being kept at record lows in order to combat deflation. However, with recession signals flashing around the world, they need to build resilient portfolios while this extended cycle prevails. Geopolitical uncertainties, such as Brexit and US-China trade tensions, are also influencing investment decisions.
Bonds worth approximately $15tn – a quarter of the debt issued by governments and companies globally — are currently trading with negative yields. The global shift to alternative assets is therefore gathering pace. Investors have flooded private markets with funds in search of returns, but is there now too much dry powder? Emerging market debt remains strong, though whether this asset class will continue to offer high returns in the face of a slowing global economy is uncertain. As yields tighten, the focus on asset management fees is greater than ever, because every basis point matters more. Will insurers’ asset management pendulum eventually swing to passive management?
At the same time, sustainable investing is becoming mainstream, but the lack of standards in ESG reporting is an ongoing debate. How can regulators offer more clarity and consistency in their guidance on ESG and help investors avoid greenwashing?
Finally, while the terms of a Brexit deal are finalised, there are still concerns over future relations between the UK and the European Union. What will the implications be for insurers? How will they be regulated, which operations will be affected, and how will they serve their European clients?
Presented by Financial Times Live and MandateWire, Managing Assets for Insurers, now in its sixth year, is a meeting point for leading investors from the insurance sector to discuss the most effective strategies to deliver growth at a time of economic slowdown and increasing market volatility.