ALIRT Research – Alternative Investment Holdings Continue to Rise Among Life Insurers as Returns Outpace Traditional Asset Classes

PR Newswire

In a recent client release, ALIRT provides an overview of the U.S. Life Insurance Exposure to Alternative Investments as of Year End 2022 and 6M2023 Financial Filings

HARTFORD, Conn., Oct. 17, 2023 /PRNewswire/ -- ALIRT Research recently released its annual analysis of the U.S. Life Insurance Industry's (represented by the 100 company ALIRT Life Composite) exposure to Schedule BA (Alternative) Investments as well as the performance of this asset class over the last year and a half.

As ALIRT shows, alternative investments are still a relatively small but growing component of U.S. life insurers' investment portfolios, accounting for 6.3% of total invested assets as of 6/30/23. ALIRT shows that demand for alternative investments has reflected the industry's desire for higher yielding investments and the industry's increased comfort dealing with the more "complex" investments (such as private equity and hedge funds) that underly this broad asset class.

ALIRT also highlights the moderation in returns and holdings growth in 2022 - following historic results for the asset class in 2021 - as financial markets wavered amid high inflation and rising interest rates. Even as financial markets remained volatile in the first half of 2023, ALIRT notes that insurers have continued to add to their holdings of alternative investments and ALIRT expects that demand for this asset class will remain even amid market volatility and higher rates.

Finally, ALIRT notes that alternative investments have risen to 55% of total industry surplus as of 6/30/23. As this asset class can exhibit greater volatility compared to more "traditional" investments, the life industry must remain cognizant of the risk-return balance of this asset class as aggregate holdings continue to rise.

For an abbreviated version of the report, please contact ALIRT at [email protected]

About ALIRT Insurance Research

ALIRT Insurance Research models the financial performance trends of life, health, and property & casualty insurers versus their peers and respective insurance industry sectors. This work is used by ALIRT's clients to meet due diligence, competitive intelligence, and sales/marketing needs. With over 20 years of experience, long-time insurance market relationships, and an emphasis on service, ALIRT helps its customers go beyond ratings and financial data to enhance and strengthen their insurance carrier oversight efforts.

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