This year, Insurance Asset Risk celebrated its 10th annual North America event – Insurance Risk & Capital Americas – a conference held in partnership with sister publication InsuranceERM.
Chlora Lindley-Myers, director, Missouri Department of Commerce and Insurance, kick started the proceedings with a keynote address highlighting key workstreams going forward for the National Association of Insurance Commissioners (NAIC).
In particular she highlighted how the regulator is aiming to reduce "blind reliance" on credit rating providers.
The conference took place at a time of heightened volatility, clearly highlighted by the first poll of the day where the audience earmarked the risk of recession and geopolitics as the key underappreciated risk of the moment.
These two risks were tackled in the day's first two panels, where the audience heard that the Fed could achieve a soft landing if considering only economic factors. But when geopolitics come into play, the landing may be bumpier.
And when geopolitics come into play, panellists said conflicts and wars are more of a concern then elections, in particular the upcoming US elections.
As the conference split up in two streams – risk and investments – discussion in the investment stream dwelled heavily on private market investments.
While insurers have become comfortable with private credit senior lending, the junior debt side is concerning, Wen-Fu Wu, deputy chief investment officer, head of fixed income, TIAA warned.
Meanwhile, Laura Parrott, head of private fixed income at Nuveen, argued that no matter the rate environment, private markets remain extremely attractive for insurers.
In a keynote interview, Nick Liolis, chief investment officer at Guardian Life, explained the ins and outs of the enhanced partnership with HPS Partners announced last month. Liolis answered audience questions around Guardian's investment strategy when it comes to private markets and its views on the asset class.
Despite some difference of opinion throughout the day that insurers tend to chase the same assets, and asset managers increasly launching private credit solutions, Liolis said the market was deep and broad enough for all insurers to find the right opportunities.
Another current hot trend – PE involvement in insurance – made its way into discussions, with a panel dedicated to the theme, and although PE insurance has largely been the preserve of the US, Stephen Radis, vice president investment management - head of portfolio management reinsurance at Metlife noted that this is starting to change, with PE insurance seeing growth in both Asia and Europe.
Evolving markets and business models inevitably lead to regulatory changes.
However, insurers argued that the NAIC's principle approach to regulation was the right one, and they were encouraged by the fact that the regulator did not press the "systemic risk button".
However, although insurers and regulators agree that change needs to be happen, a divergence of opinion remains on what needs to change and how.
