Insurance company executives believe a recession is not imminent in 2019, according to Goldman Sachs Asset Management’s (GSAM’s) eighth annual global insurance survey, Cautiously Opportunistic.
Just 2% of chief information officers (CIOs), chief executive officers (CEOs), and senior professionals at global insurance companies believe the U.S. economy will enter a recession this year. But only 16% believe the U.S. will avoid a recession in the next three years. Less optimistic are the 41% of surveyed executives who foresee recession in 2020, and another 41% who see a downturn in 2021.
This year’s survey found that slowing global growth and the reintroduction of market volatility has led to heightened credit cycle concerns, with 85% of respondents indicating we’re in the late stage of the cycle (up from 34% last year). Additionally, the results showed significant shifts in perceived risks and stalled expectations for investment opportunities. Respondents indicated that investment opportunities are either stagnant (46%) or getting worse (40%), with only 14% indicating the opportunities are improving.
“As global insurers prepare for a potential market downturn, they are taking a more selective approach to risk by decreasing allocation to public equities,” said Michael Siegel, GSAM’s global head of Insurance Asset Management. “Insurers are also shifting their asset allocation to higher-returning, less-liquid asset classes, such as private equity, in order to avoid exposure to the increased volatility as speculation around a recession continues to rise.”
The slideshow above features additional highlights from the survey.
To conduct the survey, GSAM interviewed 307 CIOs, CFOs, and senior professionals at global insurance companies, representing more than $13 trillion in balance sheet assets and approximately half of the balance sheet assets for the global insurance sector.
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