Global risks and money.
To put this in perspective, I turned to Ellen Cooper, head of global insurance strategy for Goldman Sachs Asset Management, who said "insurers need to assess risk diversification across the entire organization from an economic perspective and also understand the regulatory and financial implications."
Cooper sees insurers focusing on repositioning their investment portfolios to reduce their exposure to interest rate risk while maintaining a reasonable rate of investment income. "We're in a fairly historical low-yield-interest-rate environment. So we have insurance companies' investment income decreasing." Conversely, if rates rise, life insurers may be exposed to potential realized losses and cancellations on the liability side, she said. "As a result, many insurance companies are looking for exposures to asset classes where they can achieve their yield objective while minimizing exposure to additional interest rate risk."
Included with this issue is Best's Review's World Catastrophe map, which looks at the largest insured loss events of 2010. Last year was a painful one for insurance companies, which paid out roughly $43 billion in claims. A good amount of that total is reflected in the top 20 events of the year, including the earthquake in Chile and the Deepwater Horizon oil rig explosion and spill. It's all detailed on the enclosed pullout map.
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|Title Annotation:||From the Editor's Desk|
|Date:||Jun 1, 2011|
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