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Conning Research: Life Insurance Industry Resets Investment Strategies After 2008

Source: Conning Research & Consulting

Posted on 01 Dec 2009

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The impact of the 2008 financial crisis on the life insurance industry may dramatically influence strategic decisions in the industry in the years ahead, according to a new study by Conning Research and Consulting.

“During the five-year period of our study of life insurance investments, the industry stretched for yield and moved towards more aggressive assets,” said Gregory Smith, analyst at Conning Research & Consulting. “This shift produced initial positive results in 2006 and 2007, as insurers achieved bigger spreads over risk-free rates. Yet the market dislocations of 2008 and the resulting capital hits has had a profound effect on the industry.”

The Conning Research study, “Life Insurance Investments: The Industry Resets from 2008” analyzes life industry investments for the period 2004-2008 for the industry as a whole and for four underwriting market peer groups. Further, the study also provides detail regarding the industry’s position at the start of 2009 and how the financial crisis may influence strategic decisions in the future.

“The 2008 financial crisis and its impact on the life insurance industry will likely resonate with industry executives for some time to come,” said Stephan Christiansen, director of research at Conning. “The industry has been finalizing its tactical responses to the market dislocations and its initial recapitalization during the course of this year. Life insurers and annuity providers must now move on to plan both investment and product strategies in this lower return environment.”

“Life Insurance Investments: The Industry Resets from 2008” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company’s web site at