Goldman Sachs Exchanges How insurers are navigating volatile markets
24 snips
Apr 25, 2025 Mike Siegel and Matt Armas, both leaders in Insurance Asset Management at Goldman Sachs, dive into how insurers are adjusting to turbulent markets. They highlight a significant shift from public to private markets, spurred by inflation and recession concerns. The conversation also touches on the growing role of AI in investments, enhancing underwriting, and influencing life insurance products. Additionally, they discuss the resurgence of the insurance sector, revealing resilience amidst economic challenges and the importance of adapting asset strategies for better liquidity.
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Insurers Navigate Market Volatility
- Insurers face challenges from equity volatility but it is less damaging due to their lower equity exposure.
- Rising government rates and moderate credit spread increases can benefit insurers by providing better reinvestment opportunities.
Pivot to Private Markets
- Insurers are shifting from public to private assets to gain defensive, resilient portfolios.
- They exploit liquidity premiums and complexity premiums since they can hold less liquid assets.
Expanding Private Asset Strategies
- Insurers have long invested in private assets and now diversify further into infrastructure and asset-based lending.
- Expanding private investment categories provide higher returns and greater portfolio diversification.