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Goldman Sachs Asset Management Statement on the Russia-Ukraine War. Read it here.    

Goldman Sachs Insurance Asset Management

Insurance Survey 2022

The eleventh annual report released by Goldman Sachs Insurance Asset Management incorporates the views of 328 Chief Investment Officers (CIOs) and Chief Financial Officers (CFOs) representing over $13 trillion in global balance sheet assets. which accounts for approximately half of the global insurance industry.

As society re-emerges into a post-pandemic world, we see old complications and obstacles encompassing the macroeconomic and geopolitical landscape. Higher vaccination rates have eased worries, but rising inflation and the effect it will have on monetary policy are now top of mind. As the Russia-Ukraine conflict and financial policy uncertainty raise concerns around credit and equity volatility, investor demand remains high for yield-enhancing strategies across the risk curve in fixed income, equities, and private assets.

 

This year’s title, Re-emergence: Inflation, Yields, and Uncertainty, underscores the ever changing environment in which investment decisions are being made. Our key findings indicate that global insurers plan to maintain a risk-on investment approach, with increased allocations to private equity, green bonds, and middle market corporate loans. This year’s survey identifies market outlooks and trends and highlights respondents’ views on future investment opportunities and critical investment considerations. These include yield optimization, capital efficiency, and Environmental, Social & Governance (ESG) factors.

Key Findings

Inflation

In a sharp reversal from prior years, insurers now see rising inflation and tighter monetary policy as the largest threats to their portfolios. Amid strong wage growth and strong employment gains, the easy monetary policies of the pandemic-era are unwound and expected rate hikes are top of mind.

2022

Macroeconomic Risks (Global, %)

 

Investment Uncertainty

In 2020 and 2021, our survey respondents shared a pessimistic view regarding investment opportunities; however, 2022 respondents are more optimistic, with 63% saying the investment landscape was either the same or improving.

Investment Opportunity Landscape (Global, %)

Improving
Staying the same
Getting Worse

Yield Enhancement

Respondents remain focused on yield-enhancing asset classes, as seen by continued interest in private market opportunities. Although reinvestment rates have begun to rise in 2022, insurers expressed continued interest in alternative investments as a driver of returns.

Allocation Change (Global, %)
Global
Americas
EMEA
Asia

Environmental, Social and Governance

For the sixth consecutive year, insurers indicated that Environmental, Social and Governance (ESG) factors and impact investing are primary investment considerations. EMEA continues to lead as the region with the highest percentage of respondents noting ESG as a primary consideration, as it has since 2018.

ESG and/or impact investing consideration (Region, %)
Not a Consideration
One of Several Considerations
A Primary Consideration

Resources

About the Survey

Goldman Sachs Insurance Asset Management’s 11th annual global insurance investment survey provides valuable insights from Chief Investment Officers (CIOs) and Chief Financial Officers (CFOs) about the macroeconomic environment, return expectations, asset allocation decisions, portfolio construction and industry capitalization. We received responses from 271 CIOs and senior investment professionals, 50 CFOs and senior finance managers and 7 individuals who serve as both CIO and CFO.

 

This year, our survey includes insurance companies that invest over $13 trillion in balance sheet assets, which represents around half of the balance sheet assets for the global insurance sector. The participating companies represent a broad cross section of the industry in terms of size, lines of business and geography, as the table below illustrates.

Disclosures

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

Views expressed discussed are those of survey respondents, compiled by GSAM as of March 4, 2022. Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is provided at your request for informational purposes only. It is not an offer or solicitation to buy or sell any securities.

Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only.

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by GSAM and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates or changes.

Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant. GSAM does not provide legal, tax or accounting advice and therefore expresses no view as to the legal, tax or accounting treatment of the information described herein or any related transaction, nor are we providing any assurance as to the adequacy or appropriateness of this information or our procedures for your purposes. This material is not a substitute for the professional advice or services of your own financial, tax, accounting and legal advisors.

Environmental, Social, and Governance (“ESG”) strategies may take risks or eliminate exposures found in other strategies or broad market benchmarks that may cause performance to diverge from the performance of these other strategies or market benchmarks. ESG strategies will be subject to the risks associated with their underlying investments’ asset classes. Further, the demand within certain markets or sectors that an ESG strategy targets may not develop as forecasted or may develop more slowly than anticipated.

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

United Kingdom: In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority.

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Australia: This material is distributed in Australia and New Zealand by Goldman Sachs Asset Management Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (’GSAMA’) and is intended for viewing only by wholesale clients in Australia for the purposes of section 761G of the Corporations Act 2001 (Cth) and to clients who either fall within any or all of the categories of investors set out in section 3(2) or sub-section 5(2CC) of the Securities Act 1978, fall within the definition of a wholesale client for the purposes of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA) and the Financial Advisers Act 2008 (FAA),and fall within the definition of a wholesale investor under one of clause 37, clause 38, clause 39 or clause 40 of Schedule 1 of the Financial Markets Conduct Act 2013 (FMCA) of New Zealand (collectively, a “NZ Wholesale Investor”). GSAMA is not a registered financial service provider under the FSPA. GSAMA does not have a place of business in New Zealand. In New Zealand, this document, and any access to it, is intended only for a person who has first satisfied GSAMA that the person is a NZ Wholesale Investor. This document is intended for viewing only by the intended recipient. This document may not be reproduced or distributed to any person in whole or in part without the prior written consent of GSAMA. This information discusses general market activity, industry or sector trends, or other broad based economic, market or political conditions and should not be construed as research or investment advice. The material provided herein is for informational purposes only. This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation.

Canada: This presentation has been communicated in Canada by GSAM LP, which is registered as a portfolio manager under securities legislation in all provinces of Canada and as a commodity trading manager under the commodity futures legislation of Ontario and as a derivatives adviser under the derivatives legislation of Quebec. GSAM LP is not registered to provide investment advisory or portfolio management services in respect of exchange-traded futures or options contracts in Manitoba and is not offering to provide such investment advisory or portfolio management services in Manitoba by delivery of this material.

Japan: This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd.

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Al recibir esta presentación, y en caso que se decida contactar a Goldman Sachs Asset Management, cada destinatario residente en Colombia reconoce y acepta que ha contactado a Goldman Sachs Asset Management por su propia iniciativa y no como resultado de cualquier promoción o publicidad por parte de Goldman Sachs Asset Management o cualquiera de sus agentes o representantes. Los residentes colombianos reconocen que (1) la recepción de esta presentación no constituye una solicitud de los productos y/o servicios de Goldman Sachs Asset Management, y (2) que no están recibiendo ninguna oferta o promoción directa o indirecta de productos y/o servicios financieros y/o del mercado de valores por parte de Goldman Sachs Asset Management.

Esta presentación es estrictamente privada y confidencial, y no podrá ser reproducida o utilizada para cualquier propósito diferente a la evaluación de una inversión potencial en los productos de Goldman Sachs Asset Management o la contratación de sus servicios por parte del destinatario de esta presentación, no podrá ser proporcionada a una persona diferente del destinatario de esta presentación.”

Confidentiality

No part of this material may, without GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient.

Date of first use: April 4, 2022.

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