Vast Majority of Insurers are Confident in Fund Managers Navigation of the Financial Markets through COVID-19, State Street S...
June 30 2020 - 9:06AM
Business Wire
- Insurers Appetite for Alternatives Increases
- Insurers Look to Increase Focus on Active Management
State Street Corporation (NYSE: STT) today announced new
research[1] which reveals that 78 percent of insurers are confident
their asset managers can navigate the current financial crisis
caused by COVID-19. State Street surveyed insurance companies
around the world on the impact of the COVID-19 pandemic and their
views on how asset managers have handled the crisis.
The survey also found that insurers valued the transparency on
market conditions and strategic counsel provided during the crisis.
79 percent rated the communication, support and information
provided by them during the crisis as good. When asked what the
most important element of support provided by them has been, 76
percent say the provision of market commentary and strategic
reviews, followed by 47 percent who say their assessment of
investment opportunities.
The COVID-19 crisis has fueled the appetite of insurers for
alternative asset classes, particularly in private credit and
private equity. In the short term, 33 percent plan to increase
their allocation to private credit and 28 percent in private
equity. Alternatively, 10 percent expect to decrease their
allocation to private credit and 13 percent within private
equity.
Paul Fleming, global head of Alternative Investment Solutions at
State Street, said: “With traditional fixed income strategies
generating lower returns, we are observing insurance companies
increase allocations into this asset class at an accelerated pace.
We’re seeing an uptick in insurance firms coming to us for our
alternative asset servicing capabilities and differentiated skill
sets, as well as our broader technology offering. We believe the
current COVID-19 crisis will further intensify the move towards
alternatives.”
When it comes to their asset allocation, the survey reveals more
than a third (36 percent) of insurers expect to increase their
allocation to actively managed investments in the short-term,
compared to one in ten who anticipate it will fall, as is common
during market downturns.
Insurers have faced a variety of investment challenges during
the crisis. The survey found respondents have faced difficulties
around security valuations (39 percent); liquidity challenges (36
percent); and cash forecasting (25 percent).
John Lehner, global head of the asset manager segment State
Street said: “The COVID-19 crisis has created a number of
challenges for asset owners and managers, but our research shows
insurers appear to be coping well when it comes to their investment
operations. They have confidence in their asset managers and plan
to make changes to their asset allocation to address the new world
that we now live in.”
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors
including investment servicing, investment management and
investment research and trading. With $31.86 trillion in assets
under custody and/or administration and $2.69 trillion* in assets
under management as of March 31, 2020, State Street operates
globally in more than 100 geographic markets and employs
approximately 39,000 worldwide. For more information, visit State
Street's website at www.statestreet.com.
*Assets under management as of March 31, 2020 includes
approximately $50 billion of assets with respect to which State
Street Global Advisors Funds Distributors, LLC (SSGA FD) serves as
marketing agent; SSGA FD and State Street Global Advisors are
affiliated.
Investing involves risk including the risk of loss of
principal.
The information provided does not constitute investment advice
and it should not be relied on as such. It should not be considered
a solicitation to buy or an offer to sell a security. It does not
take into account any investor's particular investment objectives,
strategies, tax status or investment horizon. You should consult
your tax and financial advisor. All material has been obtained from
sources believed to be reliable. There is no representation or
warranty as to the accuracy of the information and State Street
shall have no liability for decisions based on such
information.
The views expressed in this material are the views of State
Street through the period ended May 27, 2020 and are subject to
change based on market and other conditions.
This news announcement contains forward-looking statements as
defined by United States securities laws, including statements
about the financial outlook and business environment. Those
statements are based on current expectations and involve a number
of risks and uncertainties, including those set forth in State
Street's 2015 annual report and subsequent SEC filings. State
Street encourages investors to read the corporation's annual
report, particularly the section on factors that may affect
financial results, and its subsequent SEC filings for additional
information with respect to any forward-looking statements and
prior to making any investment decision. The forward-looking
statements contained in this press release speak only as of the
date hereof, June 8, 2020 and the company will not undertake
efforts to revise those forward-looking statements to reflect
events after this date.
State Street Corporation One Lincoln Street, Boston, MA
02111-2900.
The whole or any part of this work may not be reproduced, copied
or transmitted or any of its contents disclosed to third parties
without State Street’s express written consent.
© 2020 State Street Corporation - All Rights Reserved
Expiration Date: 6/30/2021
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Brendan Paul, 401-644-9182 Bpaul2@statestreet.com
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