In late May, the NAIC’s Life Risk Based Capital (RBC) Working Group approved a proposal to reduce capital charges for real estate equity investments. Whereas RBC charges were previously 15% for direct investments on Schedule A and 23% for Schedule BA investments, the newly adopted charges will be 11% and 13%, respectively. This is a significant benefit for life insurers for multiple reasons.
The market conditions triggered by the COVID-19 pandemic are shifting the way fixed income investors need to think about managing and mitigating credit risk. Insurance companies will need to identify new opportunities across the full spectrum of public and private investments in order to meet their yield objectives. Join us as we discuss how to position your portfolio to take advantage of these new dynamics in credit risk management.
As the global economy continues to recover, an accommodative Federal Reserve (Fed) and stimulative fiscal policy have pushed inflation concerns to center stage. By some measures, inflation is at its highest in over a decade, and several factors could sustain these levels. Conversely, other metrics point to a more benign environment, and suggest the recent increase may be “transitory.” While we do not predict the future, we believe overall inflation risks are elevated, particularly given current spreads and valuations. In this piece, we focus on key inflation metrics and the potential impact of inflation on the insurance industry.
COVID-19 disrupted US commercial real estate fundamentals. However, we believe economic and societal shifts post-COVID-19 have also created opportunities. In this article Invesco analyzes the current investment landscape and which sectors are well-positioned to outperform in the economic recovery and likely to benefit in commerce and commercial property use.
Rate volatility and several idiosyncratic stories during the second quarter drove market performance within Emerging Markets. With delays to vaccine rollouts and continued high daily new cases and deaths hindering re-opening plans and putting excess pressure on economies, EM countries have lagged in the COVID-19 recovery. We expect Emerging Markets recovery to be a second half 2021 story, with countries starting to take active steps to reduce some of the unprecedented policy actions. We remain optimistically cautious given still robust accommodation, supportive growth and positive flow dynamics. In this paper, we look back at Emerging Markets in the second quarter, as well our expectations for the asset class in the second half of the year.

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