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Deflation Still Scares Life Insurers: KKR Analysts

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What You Need to Know

  • Inflation, deflation and monetary policy spook many.
  • Recessions are about on par with plastic skeletons.
  • Time is still what makes CIOs jump.

Just in time for Halloween haunted house design, KKR has released a new look at what scares insurers’ money managers.

The investment firm surveyed 50 chief investment officers at large insurers around the world. The insurers have about $7 trillion in assets under management.

When KKR asked the participants to name the macroeconomic risk factor that most concerns them this year, 82% cited deflation or the government’s monetary policy.

Only 16% named the risk of recession as their greatest fear, and just 3% mentioned foreign exchange risk.

When KKR asked the participants to rank their concerns, one item appeared to have the most power to terrify: a mismatch between the time investments will mature and the time benefits obligations are likely to roll in. About 72% of the participants cited investment duration and interest rate as a top risk, and 50% cited a general mismatch between assets and liabilities.

(Photo: Panimoni/Shutterstock)catego)