Non-life insurers shorten bond duration as investment returns fall
Rising long-term interest rates have left an unexpected bad taste in UK non-life insurers’ mouths. Insurers are adjusting to the new market conditions and high volatility, and are shortening the duration of their bond portfolios in a bid to insulate themselves. Hugo Coelho reports
When UK non-life insurers reported their interim results earlier in the year, their investment returns over the first six months of 2013 had taken a battering.
Lloyd’s of London, the specialist insurance market that combines the results of more than 80 insurance and reinsurance syndicates operating under its banner, reported investment returns were down 60%, falling to £247 million from £619 million in the first half of 2012.
Meanwhile, Bermuda-based specialist insurer Hiscox, which has a
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