Insurance Execs — Expect a Recession Soon

Every year Goldman Sachs Group does a quick survey of insurance executives. They want an insurance perspective on the economy. The 328 chief investment officers (CIO) and chief financial officers (CFO) — who are responsible for about $13 trillion in assets — think the U.S. is going to hit a recession in the near future.

Over 60% think the U.S. is going to go into a recession in the next two to three years. That’s a far different response from the conclusions of previous Goldman Sachs polls. In another twist, 59% worry that inflation will put a big dent in investment portfolios.

Of that 59%, a whopping 28% view it as their number-one concern for the U.S. economy. The monetary policy of the United States is in the top-three concerns and 20% put it on top.

By the way, the poll was done before Russia invaded Ukraine. Goldman Sachs Asset Management manager, Michael Siegel said that conflict has further disrupted a world economy still reeling from COVID.

“We expect to see insurers continue to build positions in private asset classes as well as inflation hedges, including private equity, private credit, and real estate,” Siegel said. “These assets can prove integral to diversifying portfolios while optimizing capital-adjusted returns, particularly over a longer-term time horizon.”

When it comes to assets that will bring in the best return, the insurance executives ranked commodities highest.

Source link: Insurance Journal