Tightening global monetary conditions, rising volatility and mounting recession fears are challenging insurers’ investment strategies. Despite the macro uncertainty, Conning believes opportunities can be uncovered by applying strong analytical skills and investment discipline as well as by leveraging our deep experience in managing through market cycles. Conning’s latest Viewpoint, “Opportunities for Insurers Within a Shifting Credit Cycle,” maps out potential solutions for these challenging times.
Author Matt Daly, who heads Conning’s Corporate and Municipal Teams of credit analysts and traders, sees potential in issuers with durable credit fundamentals that can weather an economic downturn while keeping their credit profiles largely intact. He also notes that securities issued fairly recently when interest rates were lower and credit spreads tighter may now be available at a meaningful discount to par. There may be opportunities for longer-term investors - such as insurers - who can hold them to maturity.