It seems that not a week goes by without an announcement of another merger/acquisition transaction in the life insurance industry. With an overlay of persistent capital market volatility and a sharply increased focus on ESG risk factors, life insurance executives will have their plates full of challenges for the balance of 2021. Whether large national carriers or smaller regional players, virtually every life company will experience changes in their operating environment. Our panelists will share their perspectives on how these trends will shape the insurance markets and discuss the implications for credit and risk management.
Author(s): Peter Giacone, KBRA; Celeste Guth, Erinn King, David Marcinek
A strong second half rebound helped the Massachusetts Pension Reserves Investment Trust (PRIT) end calendar year 2020 with a 12.6% return, beating its benchmark’s return of 10.8% and raising the fund to a record high of $86.9 billion in assets, according to Pension Reserves Investment Management (PRIM), which oversees the fund.
The fund also surpassed its benchmark over the past three, five, and 10 years, with annualized returns of 8.8%, 10.4%, and 8.9%, respectively, compared with 8.0%, 9.5%, and 7.6%, respectively for its benchmark over the same time periods.
Pension fund assets within the world’s 22 largest markets saw double-digit gains for the second straight year in 2020, climbing 11% to $52.5 trillion, according to the 2021 “Global Pension Assets Study” from Willis Towers Watson’s Thinking Ahead Institute.
“In what was a highly tumultuous year, pension funds continued to grow strongly in 2020, underpinned by ongoing multi-decade themes such as the rotation from equities to alternatives and the growth of DC [defined contribution], now the dominant global pensions model,” Marisa Hall, co-head of the Thinking Ahead Institute, said in a statement.
Over the past five, 10, and 20 years, those assets have seen average annualized returns of 8.0%, 6.2%, and 6.1%, respectively, up from 5.3%, 6.5%, and 5.4%, respectively, over the same time periods last year.
Global institutional pension fund assets in the 22 largest major markets (the P22) continued to climb in 2020 despite the impact of the pandemic, rising 11% to $52.5 trillion at year-end, according to the latest figures in the Global Pension Assets Study conducted by Willis Towers Watson’s Thinking Ahead Institute.
The seven largest markets for pension assets (the P7) — Australia, Canada, Japan, the Netherlands, Switzerland, the U.K. and the U.S. — account for 92% of the P22, unchanged from the previous year. The U.S. remains the largest pension market, representing 62% of worldwide pension assets, followed by Japan and the U.K. with 6.9% and 6.8%, respectively.