Majority of U.K. insurance respondents somewhat pessimistic about investment outlook

Insurance respondents taking part in an investment outlook survey in the United Kingdom were least optimistic about global financial markets in 2013, reports CAMRADATA Analytical Services Limited, an investment information specialist.

“It was the insurance respondents who were the gloomiest about the prospects for the year ahead,” CAMRADATA noted in a statement yesterday. The web-based survey in December involved pension fund, investment consultant, insurance company and asset manager users of a CAMRADATA online database and sought to gauge opinion about investment opportunities in 2013.

A chart in the survey report indicates about 70% of insurance respondents were somewhat pessimistic about prospects. “It appears that insurance companies are taking a somewhat more pessimistic view than asset managers about the global financial markets in 2013. Pension fund opinion is divided on what the future holds,” the report adds.

Asked what issues were likely to impact their organizations directly, CAMRADATA reports that respondents cited as the top three concerns regulation, the competitive environment and pressure on margins.

There was also further evidence that insurance investment managers were thinking more about the Solvency II regime with liability-matching strategies such as low-risk assets in line with their claims profile, the statement adds.

“Insurance companies unsurprisingly had a strong bias to fixed income, with the majority of respondents expecting in-flows into various types of bonds and cash,” notes the survey report. “However, as with the pension sector, there is a need for asset managers to be innovative and suggest or design non-standard products to meet the needs of the insurance companies and address the issues they are currently facing.”

CAMRADATA reports that respondents across the asset management, pension and insurance investment communities saw high-yield bonds as an attractively diversified investment in a continuing low-interest rate environment, both in terms of in-flow and returns. However, optimism about the investment environment ahead was tempered by the top three issues that continue to influence investor behaviour: the Euro crisis; continuing low interest rates; and the fallout from the U.S. fiscal cliff.