Goldman Sachs Exchanges
How insurers are navigating volatile markets
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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Quick takeaways
- Insurers are shifting their asset allocation from public to private markets to seek higher returns amidst economic challenges.
- The increasing adoption of artificial intelligence by insurers is aimed at enhancing operational efficiency and underwriting accuracy in volatile markets.
Deep dives
Navigating Current Market Challenges
Insurers are facing a volatile market environment that presents both challenges and opportunities. With their typical underweight holdings in equities, they experience market volatility without significant damage to their capitalization. This situation increases the need for effective hedging strategies, which insurers are well-equipped to manage. Additionally, rising government rates can create investment opportunities, particularly as slow increases in credit spreads provide insurers with cash to reinvest.
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