More than 8 insurers are shortening the duration of their general account investment portfolios to prepare for rising interest rates, according to new research.
Cerulli Associates discloses this finding in a new June 2014 report of “The Cerulli Edge-U.S. Monthly Product Trends.” The monthly publication helps investors track product rankings, assets, flows, developments and trends from a third-party distribution perspective.
The report reveals that 83 percent of insurers intend to shorten portfolio durations in anticipation of rising interest rates this year. Sold majorities of the companies also plan to move from benchmark-oriented strategies to unconstrained or absolute return strategies (67 percent) or increased credit exposure (56 percent). Just over one in ten of the insurers surveyed (11 percent) indicate that they intend to increase capital reserves.