News eDaily15 Sep 2017

Asia:Insurers spoilt for investment choices from InsurTech ventures to green bonds

15 Sep 2017

The number of Insurtech deals involving insurers hit 31 in 2016, a sharp increase from 2015's total of 17, according to Accenture, a leading global professional services company.

Accenture analysis reveals that the number of investment deals involving insurers and InsurTech startups has exhibited double-digit growth in the last two years. The first quarter of 2017 has maintained this pace.

Apart from InsurTech, insurers are also moving into other alternative investments in an environment in which interest rates remain low. For example, China Pacific Insurance, the third largest mainland Chinese life insurer, said this week that it will increase investment in alternative assets, including utility, energy and infrastructure projects. The insurer has already invested about US$20 billion in about 80 projects, ranging from urban utilities and infrastructure and energy, to environmental protection and public housing.

In South Korea, insurers are also looking at other investments. A group of South Korean insurance firms have invested around $160 million in mezzanine debt secured on two interconnected buildings in New York, which house Facebook Inc and other internet and technology companies.

Over in India, the asset management venture of ICICI Bank and Prudential is looking to set up a real estate investment platform with a fund of almost $400 million.

Meanwhile, HSBC Holdings says that green bonds that that finance environmental projects perform better than conventional ones issued by the same entity, particularly in developed markets. This may be due to demand for the securities pushing investors to pay steeper prices for green bonds in the secondary market.

These instances show the vast array of investment possibilities for insurers for which traditional assets like fixed income instruments and equities remain the main focus of their investment activities. This means that insurers need to keep tabs on the latest developments in the markets, including stock market and interest rate forecasts.

With the insurance industry still very dependent on investment income despite all the great strides made to boost underwriting income, Asia Insurance Review, as the voice of the insurance industry in Asia for the past 28 years, is hosting a two-day Asia Investment Management Summit for Insurance, on 30 November-1 December 2017 in Hong Kong with the theme: “Insuring an Auspicious Start to the Winning Side of 2018”, punning on the Cantonese take on “18” as “sure to prosper”.

Portents aside, the Summit will provide a platform for CEOs, CIOs, CFOs of insurers and banks, investment bankers, & fund managers to network and collaborate in search of higher returns for all. The Summit will offer insurance investment managers a head start in understanding the likely investment climate in 2018.

The Summit, to be keynoted by Dr Moses Cheng, Chairman of Insurance Authority of Hong Kong, will look at market conditions, potential areas of new investments, use of technology and blockchain, ESG and going green as well as how to use outsourcing and how “sure to prosper” in 2018.

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