Demand for various investments has been rising within the US life insurance coverage business during the last yr and a half, in response to a report just lately revealed by ALIRT Insurance coverage Analysis.

Life insurers have been growing their investments in options, which account for six.3% of complete invested belongings by the top of June 2023.

This improve in demand, ALIRT identified, reveals the business’s want for larger yielding investments and its elevated consolation coping with the extra complicated investments, reminiscent of personal fairness and hedge funds, that underly the broad asset class.

ALIRT, nonetheless, famous that whereas monetary markets remained risky within the first half of this yr, insurers have continued so as to add to their holdings of different investments. It additionally predicted that demand for this asset class would stay even amid market volatility and better charges.

The insurance coverage analysis specialist additionally revealed that various investments have grown to 55% of the overall business surplus by the top of this yr’s first half.

“As this asset class can exhibit larger volatility in comparison with extra ‘conventional’ investments, the life business should stay cognizant of the risk-return steadiness of this asset class as combination holdings proceed to rise,” ALIRT stated.

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