Insurers switch to absolute return

Benchmarking falling out of favour, says BlackRock report

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Paying out: number of insurers favouring absolute return over the next three years has risen

Increasing numbers of insurers are choosing to manage fixed-income assets on an absolute-return basis as they seek the flexibility to adjust portfolio duration in the face of possible rate rises.

A report from asset manager BlackRock, published on September 29, suggests 45% of insurers will favour absolute return over the next three years, up from 30% over the three years until now. This puts absolute return ahead of other approaches, such as book yield, excess return to benchmark and liability