Insurance Perspectives: Considerations for Investing in Emerging Market Debt

Insurance Perspectives: Considerations for Investing in Emerging Market Debt

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Lara Devieux Sara Strauch
JAN 12, 2022

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Executive Summary

  • Fundamentals and valuations in Emerging Markets (EM) remain attractive relative to Developed Markets, with manageable risks to the downside
  • For insurance companies, investing in EM debt can increase portfolio diversification and potentially generate attractive, capital-adjusted yields
  • There are various strategies and structures available for insurance investors in EM debt, some of which provide local currency exposure without associated operational issues
  • Insurance-specific considerations when evaluating the EM asset class and determining the appropriate strategy include appetite for risk and volatility, liquidity, currency exposure, and asset-liability management