What's Keeping Insurers Up at Night?

Goldman Sachs Exchanges

Julia McGonagle

Business

4.4 • 1K Ratings

🗓️ 6 May 2019

⏱️ 15 minutes

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Summary

The findings of Goldman Sachs Asset Management's (GSAM) annual insurance survey are in, and insurance companies generally believe that US markets are in late stages of the economic cycle. Of the companies surveyed, 84% indicated that the US will see a recession within the next two years, but only 2% think that the recession will come this year, explains GSAM's Mike Siegel. Given these views, along with the current environment of high equity valuations and low bond yields, the key consideration on insurers' minds, Siegel says, is "where to safely deploy their capital in order to get a recent return." This podcast was recorded on April 26, 2019. The views and opinions expressed herein should not be construed as an offer to buy or sell any securities and such views and opinions may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. This information may not be current and Goldman Sachs has no obligation to provide any updates or changes. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed. Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by any Goldman Sachs entity. The portfolio risk management process includes an effort to monitor and manage risk but does not imply low risk. Copyright 2019 Goldman Sachs & Co. LLC. All rights reserved.

Transcript

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0:00.0	This is Exchanges of Goldman Sachs, where we discuss developments currently shaping markets, industries
0:13.2	in the global economy.
0:14.3	I'm Jake Seward, global head of corporate communications here at the firm.
0:17.8	Today we're out to answer this question.
0:19.2	What's keeping insurers up at night?
0:22.1	To help us find out, we're joined by Mike Siegel Global Head of
0:24.4	Insurance Asset Management Business within Goldman Sachs Asset Management or
0:29.1	G-SAM. Mike, welcome to the program. Thank you, Jake.
0:33.0	It's good to have you back.
0:34.0	So before we dive in, give us some numbers.
0:36.0	What are the top three numbers our listeners need to know by the time they finish this episode?
0:41.0	1384 and 2. 13 trillion that's the amount of assets that the companies that
0:47.9	responded to the survey are currently managing. It's over 50% of the global
0:52.4	industry's asset base. 84% that's the percentage of
0:57.4	companies that responded that think we're going to see a recession within the
1:00.5	next three years. But only 2% think that we're going to see it this year.
1:06.0	So they see recession coming and that's influencing a lot of their investment decisions.
1:10.0	They just don't see it this year.
1:12.0	Okay, so this survey that you do every year in the insurance industry, you publish it very recently.
1:19.2	What are you trying to learn when you do this survey of this industry and the asset manager?
1:24.0	Well, investing is a core part of the industry.
1:29.0	It's half of their business.
	...

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