Singapore insurers to look more to private credit market, say observers

Local and regional insurers will likely turn more to the less liquid private credit market and other private asset funds in the coming few years as they seek to improve yields, observers said.

- Claire Huang

They noted that the declining interest rate environment and current greater market volatility make it harder for insurers to earn better investment returns.

This affects how well the insurers can balance their assets and liabilities.

In the region, insurers in Hong Kong, Japan and Taiwan are expected to feel the heat more as regulatory changes that require them to better match assets and liabilities are rolled out in a couple of years.

Singapore, being a front runner in implementing an updated version of the risk-based capital framework in 2020, could show the way for others in the region, said Aviva Investors' senior investment director Alastair Sewell in an interview.