FINEXTRA: Insurance-linked investments are opening up new opportunities for diversification
The current volatile economic environment, with the war in Ukraine, interest rate uncertainty, and the lingering effects of COVID, has enforced the need for investors to diversify their portfolios with uncorrelated assets. Insurance-linked investments, once dominated by catastrophe coverage, actually have a variety of options that, while lesser-known, meet this need and deserve more attention from investors.
Since the early days of insurance-linked assets, they have been somewhat of an outlier of alternative investments. The insurance industry is highly regulated, complex, and much of its terminology varies greatly from traditional finance. As a result, investors often require assistance to overcome these obstacles and benefit from the uncorrelated, consistent, and attractive returns insurance-linked assets can generate.