Reinsurers urged to expand equities allocation amid 'fixed-income bubble' fears

Flight to fixed income exposing reinsurers to low yields and interest and inflation risks

Stock market

Reinsurers need to increase their investment in equities to hedge the interest rate and inflation risks on their large fixed-income portfolios, according to reinsurance broker Guy Carpenter.

In recent years, reinsurers have invested heavily in high-grade, low-yield fixed-income securities as a result of the crises in the financial markets and the eurozone. At the same time, their allocation to equities has shrunk.

"The equity gearing of the sector is at the lowest point it has been at since we

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