Recent macroeconomic volatility has forced the UK’s life insurers to reconsider their risk management practices and investment decisions. Rising rates have accelerated new business pipelines, and caused insurers to rationalise the composition of their balance sheets, whilst tightening public credit spreads have led to reports of firms choosing to hold onto significant volumes of gilts. In our talk, we:
• Outline the impact of the elevated rates environment on insurers’ balance sheets and debt profiles
• Discuss how rates hedging strategies may need to evolve in light of central bank base rate cuts and substantial new business pipelines
• Assess the impact of tightening public credit spreads on insurers’ asset allocations, including a modelled view of the relative attractiveness of gilts and public credit Relevant articles that we have published in the past: https://marketinsights.natwest.com/s/shared-article?a=MWkwMDAwMDBEYmxEQUFT https://marketinsights.natwest.com/s/shared-article?a=MWkwMDAwMDBEYWdUQUFT
Speakers: Suanne Chong and James Gillespie, Natwest Markets