Insurers begin 'cautious' re-risking of investment portfolios as yields slump

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Insurance groups are increasing the risk in their investment portfolios to compensate for the low interest rate environment.

Insurers' third-quarter results show an increased allocation to equities and medium-rated corporate bonds by many re/insurers.

Zurich Insurance Group increased its allocation to equities from 2.3% to 2.9% from the second quarter to the third quarter of 2012. Munich Re increased its equity exposure from 2.2% to 2.9% (net of hedges), and Swiss Re's allocation rose from 2% to