Most insurers feel good about how their asset managers are navigating the ongoing financial crisis created by COVID-19, State Street Corp. has determined in a new survey.

Approximately 78 percent of insurers were confident their fund managers could get through the pandemic-related crisis, the survey found.

“The COVID-19 crisis has created a number of challenges for asset owners and managers, but our research shows insurers appear to be coping well when it comes to their investment operations,” John Lehner, global head of the asset manager segment for State Street, said in prepared remarks. “They have confidence in their asset managers and plan to make changes to their asset allocation to address the new world that we now live in.”

Insurers have also been happy about their asset managers’ transparency during the ongoing COVID-19 crisis, according to the survey results. Just under 80 percent rated the communication, support and information provided by them during the crisis as important and good. Market commentary and strategic reviews have also been an important service, 76 percent of insurers said. Approximately 47 percent saw asset fund managers’ assessment of investment opportunities during this period as an important service.

Other survey results:

  • The COVID-19 crisis has fueled the appetite of insurers for alternative asset classes, particularly in private credit and private equity. In the short term, 33 percent plan to increase their allocation to private credit and 28 percent in private equity. Alternatively, 10 percent expect to decrease their allocation to private credit and 13 percent within private equity.
  • 36 percent of insurers expect to increase their allocation to actively managed investments in the short term compared to 1 in 10 who anticipate it will fall, as is common during market downturns.
  • Insurers have faced a variety of investment challenges during the crisis. The survey found respondents have faced difficulties around security valuations (39 percent), liquidity challenges (36 percent) and cash forecasting (25 percent).

State Street surveyed insurance companies around the world on the impact of the COVID-19 pandemic and their views on how asset managers have handled the crisis.

State Street Corporation provides financial services to institutional investors including investment servicing, investment management, and investment research and trading.

Source: State Street Corp.