The conflict in the Middle East is creating two second-order risks for life insurers in Asia, according to HSBC CEO for Insurance Edward Moncreiffe in an interview with Asia Insurance Review. He noted that while the impact on life insurers is not direct, there are still significant knock-on effects for life insurers.
Mr Moncreiffe said the strategic investment allocation of life insurers is primarily affected, as the conflict is influencing asset prices and financial markets. “First is market risk: the impact of the conflict in the Middle East on asset prices, equities, bonds, and debt markets. This is absolutely affecting our strategic asset allocations, how we invest policyholder money, and how we anticipate further asset-side shocks,” he said.
He also noted that periods of uncertainty are driving increased de-risking behaviour among clients, prompting insurers to strengthen advisory support and reassurance. “The second point is that it is ultimately driving increased de-risking behaviour. At times like these, clients are seeking advice and reassurance, and we are scaling up our ability to deliver that advice, ensuring our products and solutions provide assurance and protection in times of uncertainty,” he said.