Insurers face a plethora of investment challenges in the current macro-environment ranging from high inflation, the Russia-Ukraine war and a possible recession. There is also fear of stagflation - where economic growth stalls but inflation remains high.
In response to the past decade of low yields, which have challenged insurers' traditional income sources, and the current challenge of rising rates, Conning has added more diverse asset classes, such as private placements and collateralised loan obligations to expand clients' options.
Conning says its practice can offer a full service to clients of every size, from cash-challenged start-ups to mature multinationals.
This approach was vindicated with net client flows of $4.6bn across the group as of 30 September 2022. The final arbiter is of course clients. And in Conning's 2021 client survey, 97% indicated they were "very satisfied" or "satisfied".
InsuranceERM's judges were impressed that Conning has enhanced its ESG methodology to ensure portfolios are fully compliant. For example, MSCI carbon emissions intensity scores and MSCI climate transition risk scores are now available for portfolio management and reporting.
Conning has also developed climate-specific dashboards so that clients can better manage, control and report the physical and transition risks of their portfolios.
Discussing its investment outlook for 2023, a spokesperson for the asset management firm says: "We deem the prospect of recession and sustained inflation pressures as the main topics of discussion."
While headline inflation appears to have peaked as energy prices recede, there are few signs that core inflation will follow any time soon, explains the spokesperson.
"We hold stronger conviction that the European and UK economies will dip into recession in 2023 as their respective central banks continue to wrestle with double-digit inflation and waning consumer confidence."