As the market eagerly awaits the next policy move from the Bank of Japan, domestic life insurers are assessing their asset allocations, especially in local government bonds, while eyeing other strategies.
Investors are trying to grapple with the right approach to tackle increased interest rates - a scenario that creates both challenges and opportunities, investment executives from different Korea asset owners say.
Market concerns and domestic regulatory changes are prompting Korean insurers to change asset preferences.
A long period with a struggling yen against the US dollar creates a challenge that the insurance companies seek to tackle, as risk concerns make overseas diversification necessary.
Ten insurers detailed their investment plans for the fiscal year ending March 2024, and one key takeaway was that they could pile more bets on local government bonds.
Two new frameworks are prompting South Korean insurance firms to rethink their investment priorities, industry experts tell AsianInvestor.
Tradeoffs must be re-assessed amid incoming regulatory changes as well as interest rate uncertainties, insurance executives from Swiss Re, Sun Life International and Manulife said.
Shifts in regulatory frameworks are demanding an expansion of skillsets beyond asset allocation, senior executives from Sun Life, Swiss Re and Manulife said at AsianInvestor’s Insurance Investment Briefing in Hong Kong.
Life insurance companies are having to adapt to new or upcoming regulatory regimes that will likely have a significant impact on investment decisions in the coming year.
An initial announcement by the life insurer to delay a foreign-currency bond redemption got called back, stoking concerns about the general economical situation in Korea, where institutions have been tested by a depreciating won.
Unfortunate circumstances have fuelled a wait-and-see investment approach by Korean asset owners for the rest of the year, AsianInvestor learned while in Seoul. Still, asset managers would be wise to visit Korea in the near future.
The increasing likelihood of a long-term downturn is prompting insurers to reassess their allocation strategy towards corporate bonds.