In the low interest rate environment, insurers are increasingly turning to alternative investments to boost yields. Consequently, much more focus is being placed on insurers’ investment risk management processes and practices. In this new report, Insurers increasingly navigate unconventional course, KPMG provides insights into meeting the challenges inherent in alternative investments, while offering ideas on gaining benefits by deploying an alternative strategy through prudent preparation, execution and monitoring.
Insurers in the US have doubled their investments in private equity, hedge funds, infrastructure, timber, collateralised loan obligations and other alternative investments over the past 10 years, and they are not alone in the rapidly transforming insurance industry around the globe.
This paper provides a series of ideas and questions that insurers may want to consider relating to asset and liability matching, balancing value against growth potential, duration risk, strategy development, and a commitment to transparency.
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