Its sizable hedging portfolio allows the life insurer to overweight alternative assets while maintaining a healthy solvency ratio.
Regional life insurers could benefit from investing in derivatives and alternative assets, but they will also need to enhance governance and credit oversight.
A mixture of low bond yields, interest rate cuts and insurers avoiding risky assets will lower returns, though A-share volatility will have a limited impact, say credit analysts.
But they may be less sure about the investments they will be able to make after the regulator updated the asset-liability management framework last week.
China's insurance firms are having to adapt quickly as their domestic watchdog pushes for large-scale reforms on several fronts.
The insurer’s Hong Kong head of asset-liability management has left as fund houses look to boost their actuarial and solutions expertise in Asia.
Mainland insurance firms hold high cash allocations to help them manage short-term savings products – but this may be storing up trouble, says rating agency Moody’s.
In the latest issue of AsianInvestor magazine, we assess how regional institutions are addressing the global ESG trend and what they need to do. We also have a special report on how insurance companies across the region are adapting to yield compression.
AsianInvestor speaks to Eugen Loeffler about how the German insurer’s Asia business goes about matching its assets to liabilities.
Yet only half of institutions globally are using asset-liability matching strategies, although they seem to have improved these capabilities, finds a Natixis Global Asset Management survey.
Life insurers in the region are starting to recognise the benefits of a stronger focus on asset-liability management, as they move to diversify their investment portfolios.
The German insurer is among a growing number of firms in Asia putting more focus on asset-liability management.