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GSAM’s Fourth Annual Insurance Survey Finds the Most Pessimism Among Insurers in Four Years

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Goldman Sachs Asset Management (GSAM) released its annual insurance survey, “Too Much Capital, Too Little Return,” which finds that while insurers believe the industry is well capitalized, finding attractive investment opportunities is increasingly challenging in an investment environment characterized by negative yields, tight spreads, and high equity prices. Insurers demonstrated the greatest amount of pessimism since GSAM began conducting the survey four years ago.

“Insurers are concentrating on finding new investment opportunities which are sparse because yields still remain at low levels, and insurers are not anticipating a meaningful increase in rates this year,” said Michael Siegel, GSAM’s Global Head of Insurance Asset Management. “Nonetheless, one-third of insurers globally intend to increase overall portfolio risk. Insurers believe equity asset classes will outperform credit assets and they are looking to increase allocations to less liquid, private asset classes.”

EMEA and Pan Asian insurers demonstrated a stronger risk appetite compared to their peers in the Americas. EMEA-based insurers have increased their risk appetite over the years, while Pan Asian insurers are looking to increase credit and equity market risk. Americas-based insurers which have demonstrated a strong risk appetite over the years are now comfortable with their risk levels and are planning to maintain overall risk.

Insurers singled out the pace of US economic growth as the greatest macroeconomic risk. CIOs and CFOs believe the dollar will continue to strengthen due to a stronger economy and relatively higher interest rates. As yields moved lower in 2014 and central banks expanded “QE” programs, insurers have lowered their expectations around rates.

Additional key findings of this year’s survey include:

  • Insurers globally intend to increase allocations to less liquid, private assets. They intend to increase allocations to commercial mortgage loans, infrastructure debt, private equity and middle market loans. Consistent with their return expectations, insurers intend to decrease allocations to highly liquid assets such as cash and short-term instruments and government and agency debt.
  • Equity asset classes are expected to outperform credit asset classes. Insurers anticipate that the highest returning asset classes will be private equity, US equities, and European equities this year.
  • Despite years of unprecedented global monetary easing, insurers have become more concerned about deflation in the near term due to slow global growth and lower commodity prices. Insurers anticipate commodities will be amongst the lowest returning asset classes this year. Insurers have pushed out their concerns regarding inflation to the medium term.
  • Insurers are looking to outsource both core and niche asset classes to third party asset managers. They intend to outsource hedge funds (26%), emerging market equities (23%), US investment grade corporates (23%) and private equity (22%).


GSAM Insurance Asset Management Survey partnered with KRC Research, an independent third party research firm, to conduct the 2015 survey from February 3 – 25, 2015. The global online survey received 267 responses, including 208 CIOs, 48 CFOs and 11 individuals who serve as both CIO and CFO. The global respondent base included Life, Property & Casualty, Multi-Line, Reinsurance, and Health insurers. This study represents insurers with over $6 trillion in global balance sheet assets.

GSAM currently oversees over $160 billion in insurance assets as of December 31, 2014 and is ranked among the top 5 insurance asset managers worldwide.* GSAM’s insurance capabilities include partial to full outsourcing solutions involving fixed income strategies, alternative investments and equities. The group offers a suite of advisory services including asset liability management, strategic asset allocation, capital-efficient investment strategies and risk management.

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Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group, Inc. (NYSE:GS) , which oversees $1.15 trillion in assets under supervision as of March 31, 2015. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.

*P&I Online, The Largest Managers of Total Insurance Assets. Results as of March 31, 2014.

This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.

United Kingdom and European Economic Area (EEA): In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority.

Asia Pacific: Please note that neither Goldman Sachs Asset Management International nor any other entities involved in the Goldman Sachs Asset Management (GSAM) business maintain any licenses, authorizations or registrations in Asia (other than Japan), except that it conducts businesses (subject to applicable local regulations) in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, and India. This material has been issued for use in or from Hong Kong by Goldman Sachs (Asia) L.L.C, in or from Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), in or from Malaysia by Goldman Sachs (Malaysia) Sdn Berhad (880767W) and in or from India by Goldman Sachs Asset Management (India) Private Limited (GSAM India).

Australia: This material is distributed in Australia and New Zealand by Goldman Sachs Asset Management Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (‘GSAMA’) and is intended for viewing only by wholesale clients in Australia for the purposes of section 761G of the Corporations Act 2001 (Cth) and to clients who either fall within any or all of the categories of investors set out in section 3(2) or sub-section 5(2CC) of the Securities Act 1978 (NZ) and fall within the definition of a wholesale client for the purposes of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA) and the Financial Advisers Act 2008 (FAA) of New Zealand. GSAMA is not a registered financial service provider under the FSPA. GSAMA does not have a place of business in New Zealand. In New Zealand, this document, and any access to it, is intended only for a person who has first satisfied GSAMA that the person falls within the definition of a wholesale client for the purposes of both the FSPA and the FAA. This document is intended for viewing only by the intended recipient. This document may not be reproduced or distributed to any person in whole or in part without the prior written consent of GSAMA. This information discusses general market activity, industry or sector trends, or other broad based economic, market or political conditions and should not be construed as research or investment advice. The material provided herein is for informational purposes only. This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation.

Canada: This material has been communicated in Canada by Goldman Sachs Asset Management, L.P. (GSAM LP). GSAM LP is registered as a portfolio manager under securities legislation in certain provinces of Canada, as a non-resident commodity trading manager under the commodity futures legislation of Ontario and as a portfolio manager under the derivatives legislation of Quebec. In other provinces, GSAM LP conducts its activities under exemptions from the adviser registration requirements. In certain provinces, GSAM LP is not registered to provide investment advisory or portfolio management services in respect of exchange-traded futures or options contracts and is not offering to provide such investment advisory or portfolio management services in such provinces by delivery of this material.

Japan: This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd.


No part of this material may, without GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient.

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