In a recent webinar to the Association of Financial Mutuals (AFM), Royal London Asset Management presented on the theme of ‘Investment allocation in a ‘managing Covid’ world’.
At the time of the webinar (8 February 2022), major economies had begun operating closer to their pre pandemic levels, but with inflation expectations sitting at multi-decade highs and central banks generally starting to gradually increase interest rates. Furthermore, with valuations of both bonds and equities now more fully priced, prospective returns from financial assets were generally muted relative to recent historic levels.
In addition to the market and economic backdrop, it was noted that the other major theme for insurers was in recognising and managing climate-related financial risks within investment strategies as well as wider business models.
In this context and in our experiences from our wider insurance client-base and network, most insurers were planning to reassess to some degree their investment allocations in 2022.
As part of the AFM webinar, the attendees were polled on various areas relating to their investment allocations and approach. This paper shares some of the key insights from the polls.
The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.