Many countries at risk because of $168 billion annual gap in insurance
Lloyd’s warns of $168 billion shortfall in insurance; liability streams should always be matched
There are many countries at risk because of this gap, and the 7.3 magnitude earthquake in Japan this month could serve as a reminder of the 2011 earthquake and tsunami, where only USD 35 billion of the estimated USD 210 billion in total damages had been insured.
To ensure long-term viability of their business, the advice that Sindhu Srivastava, Portfolio Manager, Quant Solutions at Aviva Investors North America would like to give to insurance asset managers is that assets be managed versus liabilities in such a way that there is almost no risk to the viability of their firm. With the economic crisis, insurance companies are finding themselves with less room to maneuver today, as they had not prepared for that scenario. They need to position themselves to be ready for severe prolonged downdrafts, adequate reserving is of utmost importance, Srivastava added.
A speaker at the upcoming GFMI Best Practice in Managing Insurance Assets Conference (http://www.global-
The underlying problem for insurance companies is essentially the regulations that are coming into play, especially in Europe, and the new economic environment.
“More investors are now aware of the need to have enough liquidity reserves to survive a crisis with adequate margin of safety, so it is a legitimate concern that asset management in the insurance industry is changing. The more confident insurance companies are of their asset management capabilities, the better and more types of products they will be able to offer to customers,” Srivastava concluded.
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The GFMI Best Practice in Managing Insurance Assets Conference will take place in New York City, January 28-30, 2013.