Credit Risk Insurance – European Forum – Family Mediation Wed, 19 Jan 2022 18:33:41 +0000 en-US hourly 1 Credit Risk Insurance – European Forum – Family Mediation 32 32 AM Best revises outlook to stable for Halyk Insurance Company JSC Wed, 19 Jan 2022 18:25:00 +0000

LONDON–(BUSINESS WIRE)–AM Best revised the outlook from negative to stable and affirmed the financial strength rating of B++ (good) and the issuer’s long-term credit rating of “bbb” (good) of the joint stock company subsidiary of Halyk Bank of Kazakhstan Halyk Insurance Company (Halyk Insurance) (Kazakhstan).

These credit ratings (ratings) reflect the strength of Halyk Insurance’s balance sheet, which AM Best assesses as very strong, as well as its strong operational performance, limited business profile and marginal management of business risks.

The revised outlook to stable indicates the increased resilience of the company’s balance sheet as well as management’s actions to address underperformance in mandatory motor vehicle liability (MTPL) policies, supported by improved risk selection and discipline. subscription.

Halyk Insurance’s balance sheet strength is underpinned by top-tier risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and its relatively conservative investment portfolio with good liquidity. . Internal capital generation is supported by a revised dividend policy which limits the annual dividend distribution to a maximum of 50% of the previous year’s earnings. Compensating factors include the company’s reliance on reinsurance and its significant exposure to the high risk of the financial system in Kazakhstan.

Underwriting results improved slightly in 2020, with the company posting a combined ratio of 96.1% compared to 97.9% in 2019 (as calculated by AM Best). 2020 results were positively impacted by lower loss ratios for MTPL’s portfolio due to pandemic-related lockdowns. Overall profitability was strong, demonstrated by a five-year (2016-2020) weighted average return on capital of 14.0%, although this was partly the result of strong investment returns, given the inflationary environment relatively high in Kazakhstan in recent years. Halyk Insurance is one of the leaders in its domestic non-life insurance market, ranking second in terms of gross written premiums in 2021.

AM Best does not consider the financial strength of Halyk Insurance to be affected by the weaker credit profile of its parent company, Halyk Savings Bank of Kazakhstan JSC (Halyk Bank). This reflects AM Best’s consideration of the regulatory protection that restricts the extraction of capital from the insurer to its detriment.

This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity webpage. For more information on the use and limitations of credit rating opinions, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best’s Credit Scores, Best’s Preliminary Credit Scores, and AM Best’s press releases, please see Best’s Scores and Ratings Proper Use Guide.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

How Credit Unions Fight Online Fraud Mon, 17 Jan 2022 20:34:41 +0000

When you think of a credit union (CU), it’s easy to imagine a place that values ​​member relationships and face-to-face banking.

While this business model has generally worked to CUs’ advantage, it may also leave some of these institutions ill-prepared for the COVID-fueled shift to digital-first banking – and the risk of online fraud that comes with it. .

However, many UCs have begun to leverage technologies such as artificial intelligence (AI) and machine learning (ML) to bolster their risk management efforts. For example, AI systems can search large amounts of data to protect against the threat of synthetic account fraud without the need for manual review, providing cost savings to UCs.

UCs that use AI platforms to prevent fraud can reduce false positives and human errors, reduce friction with customers, and give staff more time to focus on improving customer service. members’ experience.

How does UC compare to other FIs on data security?

UC strives to catch up with the data security innovations of other financial institutions to combat fraud.

As recent research from PYMNTS revealed, 93% of UCs fund digital security, authentication or identity – more than double the amount in 2020 and almost triple the amount in 2019.

The past year has also seen a surge in the number of CUs investing in fraud and money laundering prevention. While only 69% of CUs reported investing in fraud prevention innovations in 2021 – down from 72% in 2018 – that figure is still a marked improvement from 45% in 2020.

AI can also help UCs prevent fraud so they can continue to do what they do best: delight customers by meeting their demands and expectations. As scammers step up their game, UCs could benefit from working with vendors of AI-based anti-fraud solutions that can offer enhanced security while optimizing the member experience.

If you want to learn more about this topic, download a copy of Credit Union Tracker, a collaboration between PYMNTS and PSCU.



On:More than half of US consumers believe biometric authentication methods are faster, more convenient and more reliable than passwords or PINs. So why do less than 10% use them? PYMNTS, in collaboration with Mitek, surveyed over 2,200 consumers to better define this perception in relation to the usage gap and identify ways companies can increase usage.

Scots have just days to install new fire alarms or insurance policies risk becoming worthless Sun, 16 Jan 2022 04:30:00 +0000

Hundreds of thousands of Scottish homeowners have just days to fit new fire alarms or risk their insurance policies becoming worthless.

Controversial legislation which came into effect on February 1 requires every property to have an ‘interconnected’ system costing up to £400.

And the Association of British Insurers (ABI) has confirmed to the Sunday Mail that failure to meet the new legal security standard could affect existing insurance policies.

The Scottish Government is facing furious demands to delay the rules over fears the vast majority of homeowners will still not have the alarms or even be aware of the change.

An ABI spokesperson said: ‘Insurers will expect households and businesses to comply with any legislation on property requirements, such as fire alarms.’

The requirement for linked alarms has already been delayed for a year due to the pandemic.

There have been blockages in the supply of alarms, as well as problems with public awareness.

However, 12 months later, little has changed, raising concerns that insurers will refuse to pay out a claim from someone who has not installed a new system.

Stuart McLintock, owner of ABC Electrical in Kilmarnock, said: ‘There is certainly a big problem with the fact that the majority of homes still don’t have one – and that could obviously have a ripple effect on fonts insurance.

“The Scottish Government also understates the cost on their website when they say a system can be installed for £220 in an average home.

“The alarms themselves, even if you install them yourself, will probably cost around £280. For a larger house it will be a bit more.”

Under the new rules, homes must have interconnected smoke detectors in the living room, hallways and landings and a heat alarm in the kitchen.

Stuart McLintock

Scottish Conservative Shadow Housing and Local Government Secretary Miles Briggs MSP said: “The SNP has already postponed this scheme once but it is not enough.

“They need to postpone it once again to ensure owners are fully prepared for these significant changes.”

Mark Griffin, spokesman for Labor Communities and Scottish Local Government, said: ‘The SNP’s failure to recognize the chaos that is engulfing this program is simply stunning.

“That deadline now needs to be pushed back a further year, so that the mess created by the SNP can be resolved.”

Miles Briggs MSP said: 'The SNP has already postponed this program once, but that's not enough"
Miles Briggs MSP

A Scottish government spokesperson said: ‘No one will be criminalized if they need more time and there are no penalties for non-compliance.

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]]> AM Best withdraws credit ratings from some Farmers Insurance Group members Fri, 14 Jan 2022 15:23:00 +0000

OLDWICK, NJ–(BUSINESS WIRE)–AM Best removed Financial Strength Rating (FSR) from A (Excellent) and Issuer Long Term Credit Rating (Long Term ICR) from “a” (Excellent) from 21st Century Indemnity Insurance Company (Harrisburg, PA), 21st Century Pacific Insurance Company (Denver, CO) and 21st Century Auto Insurance Company of New Jersey (West Trenton, NJ), which were former members of Farmers Insurance Group.

AM Best has withdrawn these credit ratings (ratings) as the companies are not currently venture entities, nor are they currently part of any reinsurance or pooling arrangement that would warrant support from another entity. AM Best does not currently perform ratings on non-risk bearing entities. Should these entities revert to risky entities, they would be eligible to participate in AM Best’s interactive rating process.

These companies were acquired by Everspan Insurance Company, which is a member of the Everspan Group and currently holds an FSR of A- (Excellent) and a long-term ICR of “a-” (Excellent), on January 1, 2022, in the form of dormant shells clean.

This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity webpage. For more information on the use and limitations of credit rating opinions, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best’s Credit Scores, Best’s Preliminary Credit Scores, and AM Best’s press releases, please see Best’s Scores and Ratings Proper Use Guide.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

MORGAN STANLEY FWP Form Submitted by: MORGAN STANLEY Wed, 12 Jan 2022 18:17:41 +0000

treaty past bet with the claims of other unsecured and unsubordinated creditors of Morgan Stanley, including holders of securities issued by Morgan Stanley.

The amount payable on the Securities is not linked to the value of the Underlying Index at any time other than on the Valuation Date. The Final Index Value will be based on the Closing Index Value on the Valuation Date, subject to deferral for Non-Index Business Days and certain Market Disruption Events. Even if the value of the Underlying Index rises before the Valuation Date but then falls on the Valuation Date, the Maturity Payment may be lower, and significantly lower, than it would have been had the Maturity Payment been linked to the value of the Underlying Index prior to such decline. Although the actual value of the Underlying Index on the Maturity Date indicated or at other times during the term of the Securities may be greater than the Final Index Value, payment at maturity will be based only on the closing value of the index on the valuation date.

Investing in the Securities is not equivalent to investing in the Underlying Index. Investing in the Securities is not the same as investing in the Underlying Index or its constituent stocks. Investors in the Securities will not have any voting rights or rights to receive dividends or other distributions or any other rights with respect to the shares which constitute the Underlying Index.

The rate we are willing to pay for securities of this type, maturity and issue size is likely to be lower than the rate implied by our secondary market credit spreads and beneficial to us. The lower rate and the inclusion of the costs associated with issuing, selling, structuring and hedging the securities in the initial issue price reduce the economic terms of the securities, cause the estimated value of the securities is lower than the initial issue price and negatively affect secondary market prices. Assuming market conditions or other relevant factors do not change, the prices, if any, at which dealers, including MS & Co., might be willing to purchase the securities in secondary market transactions will likely be significantly lower than the original issue price, because secondary market prices will exclude issue, selling, structuring and hedging costs which are included in the original issue price and which you bear and because secondary market prices will reflect our secondary market credit spreads and the bid-ask spread that any broker would charge in a secondary market transaction of this type as well as other factors.

The inclusion of the costs of issuing, selling, structuring and hedging the securities in the initial issue price and the lower rate we are willing to pay as the issuer makes the economics of the securities less favorable for you than they otherwise would be.

However, since the costs of issuing, selling, structuring and hedging securities are not fully deducted upon issuance, for a period of up to 6 months after the date of issue, to the extent that MS & Co. may buy or sell the securities on the secondary market, absent changes in market conditions, including those relating to the underlying index, and in our credit spreads in the secondary market, it would do so based on higher than appraised values, and we expect these higher values ​​to also be reflected in your brokerage account statements.

The estimated value of securities is determined by reference to our pricing and valuation models, which may differ from those of other brokers and do not constitute a maximum or minimum price in the secondary market. These pricing and valuation models are proprietary and based in part on subjective opinions of certain market data and certain assumptions regarding future events, which may prove to be incorrect. Therefore, since there is no industry-standard way to value these types of securities, our models may produce a higher estimated value of securities than that generated by others, including other brokers on the market if they attempted to price the securities. . Further, the estimated value on the date of pricing does not represent a minimum or maximum price at which brokers, including MS & Co., would be willing to purchase your securities in the secondary market (if any) at any moment. The value of your securities at any time after the date of this document will vary based on many factors which cannot be predicted with precision, including our creditworthiness and changes in market conditions. See also “The Market Price of the Securities Will Be Affected by Many Unpredictable Factors” above.

The securities will not be listed on any stock exchange and secondary trading may be limited. The Securities will not be listed on any stock exchange. Accordingly, there may be little or no secondary market for the securities. MS & Co. may, but is not obligated to, make a market in the Securities and, if it once elects to make a market, may discontinue doing so at any time. When it makes a market, it generally does so for trades of common size in the secondary market at prices based on its estimate of the current value of the securities, taking into account its bid/ask spread, our credit spreads , market volatility, the notional size of the proposed sale, the cost of unwinding any related hedging position, the time remaining to expiration and the likelihood that it will be able to resell the securities . Even if there is a secondary market, it may not provide enough liquidity for you to

UK retailers warn sales of soaring cost of living in 2022 | Retail business Tue, 11 Jan 2022 00:01:00 +0000

UK retailers have said the soaring cost of living threatens to push department store sales down in 2022 after a bumper Christmas market period and a year of recovery in consumer spending.

Sounding the alarm on the risks to the UK economy as a whole, the British Retail Consortium said there were significant headwinds for the industry in 2022 due to high inflation, rising prices energy bills and planned tax increases.

In a joint report with accounting firm KPMG, BRS said the soaring cost of living would erode household purchasing power and could potentially weigh on retail sales after a strong holiday season and a year of recovery of the ground lost during the first stage of the Covid-19 pandemic.

According to the latest snapshot, total retail sales rose 2.1% in the key month of December, from a year earlier, and 4.6% from 2019, before the pandemic hit. .

Reflecting a stronger performance for the full year, as the UK economy recovered from repeated lockdowns, total sales rose 9.9% from 2020 and 6.6% from 2019 .

However, retail bosses have said the emergence of Omicron and increasing pressure on household budgets could affect sales in early 2022.

Helen Dickinson, CEO of BRC, said: “Retail faces significant headwinds in 2022 as consumer spending is held back by rising inflation, rising energy bills. and the increase in national insurance in April.

“They will need continued agility and resilience if they are to weather the coming storm, while also tackling the issues of labor shortages to rising costs of transportation and logistics.”

Boris Johnson is under increasing pressure from his own MPs to act on the crisis. Household utility bills are expected to rise sharply from April, when energy regulator Ofgem raises its consumer price cap after soaring wholesale gas and electricity prices. Energy industry bosses have said prices could rise by more than 50%, or around £ 700 a year, in the event of a ‘national crisis’. The increase will come on the same month as the introduction of the government’s plan to increase national insurance by 1.25 percentage points.

According to the BRC and KPMG report, clothing and jewelry sales continued to dominate Christmas gift shopping, while spending on food and drink was strong despite concerns over Omicron’s impact. Industry executives said concerns about supply chain issues appeared to have been overcome as retailers “hit the ground running.”

Dickinson said many people chose to shop online in December rather than taking to nearby shopping streets and malls. Sales of loungewear increased as office staff returned to work from home and spending on formal wear declined when the Christmas holidays were canceled.

Separate figures from Barclaycard showed consumer card spending rose 12.2% in December compared to the same period in 2019, boosted by shopping in supermarkets as consumers stocked up on food and drink for the parties.

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However, hospitality and recreation spending plummeted as festive gatherings were canceled and more people were isolated or opted to stay home.

Barclaycard, the UK’s largest credit card provider, processing almost half of all card transactions, said spending at restaurants fell 14.1% in December compared to the same month in 2019, and followed a 3.5% drop in November. Spending in bars, pubs and clubs in December rose 21.2%, down from the 35% increase in November compared to the same months in 2019.

Barclaycard said 43% of 2,000 people polled on behalf of the credit card provider expected high inflation to affect their household budget. “The economic picture as a whole encourages consumers to be more careful with their discretionary spending,” he said.

Here are some financial gifts that can secure the future of your loved ones Sun, 09 Jan 2022 01:30:00 +0000

If you are thinking of buying something special for your loved ones for the New Year, then go ahead! Offering financial products would be the best thing to do. Imagine investing in something that can secure their financial needs and help them build a better future. Let’s look at some of the gift ideas that can make their 2022 special:

The stocks are still in: Buying stocks of reputable and financially healthy companies is a good option. You can transfer the shares directly to the recipient’s Demat account by entering his name, Demat account number and the number of shares to be transferred in the delivery instruction slip.

SIP in mutual funds: It is about investing systematically in the funds of your choice. It is a long term investment where you have to make monthly, quarterly or annual payments. This will help them achieve their goals.

SIP in Exchange Traded Funds (ETFs): Investing in an ETF is a unique way to brighten up their 2022. You can invest in equity, gold or debt ETFs depending on your preference. These instruments can be easily bought and sold in the secondary market and have low management fees.

Insurance policy: Securing your family has become extremely essential in these uncertain times. Therefore, purchasing a health and life insurance policy would be the most valuable gift for them. Decide on a decent health insurance policy that will suit your needs. In addition, publicizing the adequacy of insurance will be of great value to those close to you. Insurance generally must be purchased for protection against health and illness. There shouldn’t be any other insurance policy in an individual’s wallet.

Buy an annuity: Annuities refer to a defined benefit pension, which the insurance company guarantees for life or for a specified period to the beneficiary or to an annuitant. A fixed or variable deferred annuity takes care of the longevity risk, that is to say the risk associated with the survival of the assets.

Some annuities also come with a death benefit. The death benefit not only helps that particular person, but also their immediate dependents in the event of an unfortunate incident. Annuities should not be confused with insurance products. Although only an insurance company is allowed to sell annuities, they are different from traditional insurance policies.

Offer a subscription from a SEBI Authorized Investment Advisor (RIA): Buying stocks and mutual funds involves risk. The risk here is better understood by market experts and professionals. Quality advice is quite underestimated in today’s digital world and therefore offering the service of a SEBI RIA will be very kind to your loved ones. Financial planning helps in the long run and only a registered investment advisor can add value here.

Repayment of liabilities: While credit discipline is important, paying off the debts of your loved ones in times of distress, when possible, will be a huge relief.

Financial knowledge: Enroll them in an online course that can ease their financial literacy, improve their financial planning, and help them achieve financial independence. With proper knowledge, an investor is less prone to abusive sales.

(The author is the CEO of Tavaga Advisory Services)

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KSU Workshop Series “Risk Management Skills for Women in Agriculture” Fri, 07 Jan 2022 11:19:37 +0000

Cottonwood Extension District

On farms large and small in the state of Kansas, the number of women involved in decision-making on farms and ranches is increasing. In this context and especially given the ups and downs of the agricultural economy, Kansas State University and the Cottonwood Extension District will host two sites for the series of workshops aimed at helping women hone their risk management skills.

The K-State Research and Extension program, Cottonwood District, will run in a series form, so each evening session builds on material from previous sessions. Participants register at a cost of $ 50 for the entire series. The fees cover all meals and program materials.

Sessions, every Wednesday, are scheduled for January 12, January 19, January 26, and February 2, with an optional session on February 23, from 5:30 p.m. to 8:30 p.m. and will be held in Hays, at the Meeting Room Extension Office, 601 Main Street and Great Bend at American Ag Credit, 5634 10th Street. Sessions will include a mix of broadcast keynote speakers as well as local speakers.

The registration deadline has been extended to Friday January 7 online at under “events” or contact the Hays office 785-628-9430 or Great Bend 620-793-1910.

Topics will include business budgets (determining production costs), crop insurance, stress and resilience, crop marketing, family communication, Farm Bill programs, and cow / calf business budget. .

There are 36 locations in the state that host this series, to find the one closest to you go to the Ag Manager website listed above.

More than 25,500 women are farm makers in Kansas. They farm over 14 million acres, according to the U.S. Department of Agriculture’s Census of Agriculture. Overall, in 2017, 36% of all agricultural producers in the country were women, up from 31.5% in 2012. Fifty-six percent of farms had at least one female decision-maker.

“Women in agriculture will be specifically targeted for these workshops,” said Stacy Campbell and Alicia Boor, Cottonwood District Crops and Livestock Officers and K-State Research and Extension. “They tend to be an underserved demographic, but are often involved or only perform risk management tasks for the operation. Teaching them the skills to help supplement company budgets, make crop insurance decisions, help relieve stress on farm families, as well as understand Farm Law programs.

The program is supported by the USDA National Institute of Food and Agriculture through the North Central Extension Risk Management training.

Don’t delay, the registration deadline has been extended to January 7 on under “events”.

Stacy Campbell is the Agricultural Production Extension Officer in Cottonwood District (which includes Barton and Ellis counties) for K-State Research and Extension. You can contact him by e-mail at [email protected] or by calling 785-628-9430.

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Investment outlook: the bond market in 2022 Wed, 05 Jan 2022 08:00:20 +0000

2021 has been a difficult year for bond investors, with inflation eclipsing bond markets throughout the year. Will investors see any improvements this year? Money Marketing asked four bond experts to share their outlook for 2022.

Kipp Cummins, Head of EMEA Bonds and Vice President of Dimensional Fund Advisors

The first quarter of 2021 was difficult for bond investors. Talks about tapering and expectations of rising inflation have pushed yields higher and prices lower. For long-term bond investors, this meant negative returns at the start of the year. In some bond markets, this was the worst quarter in decades.

Few bond investors experience a rout, but this volatility creates opportunities that we can systematically exploit. The level of return is only part of the fixed income story, and a flexible approach to term, credit and country exposure can increase your expected return.

For example, the yield curve for the US Treasury steepened in 2021, which means that US medium and long-term bonds are now paying comparatively more than in 2020; more than their shorter-term counterparts; and more than other equivalent markets (including UK). The same goes for curves in Australia, New Zealand and Canada.

The flexibility to allocate to other countries (while hedging exposure to foreign currencies) and the dynamic adjustment of forward exposure, presented opportunities to increase the expected returns of bond portfolios in 2021.

This flexibility is also useful in the credit markets. When credit spreads widen, your expected return should increase. This has made corporate credit markets relatively less attractive than their higher-quality government counterparts recently, as the difference in yield between higher-rated and lower-rated bonds (the spread) has been narrow. We will be watching this closely next year and if markets start to reassess credit risk and spreads widen, we will look to take on more credit risk by buying lower rated bonds in search of higher premiums. high.

An important consideration in 2022 will be understanding how asset prices are set. Information (even information speculation) is quickly processed and incorporated into prices. This means that today’s prices already reflect everyone’s expectations for this year’s themes such as cut, central bank rate, inflation, credit risk and anything that affects value. current future cash flow. Adopting a strategy that accepts this point and can aim for a return above the market without relying on the predictions of these variables may make sense.

Peter Doherty, Head of Fixed Income at Sanlam

As an investor with over 30 years of experience in the financial markets, I have developed a healthy skepticism about the usefulness of macro forecasting. Not only is macro forecasting virtually impossible, but taking advantage of a good market response to a given macro environment is the second part of the challenge.

Indeed, consumer and commodity price inflation in 2021 provided the perfect example of values ​​that no one had expected (3% pa ​​to 8% pa) combined with a bond market reaction that no one had expected. could not have expected. given these inflation rates (US, UK and European 10-year yields) which end the year well below 2%.

Two drivers of significantly negative real rates on government bonds and part of the credit markets can be seen as “tactical” and “structural”.

Tactically, investors have kept government bonds with the idea that inflation is transitory (transitory having taken over from “unprecedented” as the term most used). Structurally, and I think much more importantly, the regulatory framework of banks, insurance companies and pension funds results in massive uneconomic demand for government bonds which are therefore by definition artificially expensive.

So a starting point for navigating fixed income securities in 2022 is to minimize government bond holdings in favor of cash. There is an argument for staying invested in the asset class because if this demand is permanent, there will always be support for the market. But, given the very low real yields and very flat yield curves (meaning that the yields don’t increase much with maturity), cash is arguably safer because it has no nominal value risk, only a “real value” risk.

Second, in 2018-2021, many companies took advantage of low multi-generational interest rates to issue bonds. While corporate balance sheets are generally strong right now, in the event of an economic downturn or prolonged economic downturn related to Covid-19, credit may become less readily available and credit spreads may increase.

If we look at the global credit markets, there are many Single A and BBB bonds with a yield of less than 3% and where the duration and credit risk are built in. The risk here is less about the permanent loss of default capital and more about the market risk and mark-to-market losses, which can take a long time to recover from the current low return. The SLXX LN ETF is a perfect example: it has a negative return worse than – 4% in 2021 or greater than “- 8% actual”.

There is virtually no risk of default in the portfolio’s credit securities, but the combination of low yields, credit market risk and long duration is toxic. The 2021 market decline in this ETF will take more than 2 years to recover at current yields on a nominal basis only and rather 4 years on an actual basis. If yields continue to rise, this time around, sustaining capital value in real terms could easily extend over 6 to 8 years. It is a risk with no return.

So what to do? Today’s environment lends itself beautifully to detailed research, bottom-up investing, and “brick-by-brick” portfolio construction. Every £ of allocated capital must be useful! This means recovering idiosyncratic premiums, liquidity and complexity from individual titles where there is clearly identified differentiation and added value characteristics.

Ironically, the flip side of QE and central bank lavishness is that there is no more free money to invest on credit – certainly not after inflation. The generic long index only and fixed income ETF products offer the average return of the asset class and I can say without ambiguity that in 2022 this average return of an average generic fixed income portfolio will not be attractive. Be active, focus, and leave the unattractive generic market middle on its own until it redefines pricing to deliver an investment return.

Jim Leaviss, Director of Investments, Public Fixed Income

If you had asked me a few years ago where the yield on 30-year bonds would be if inflation in the United States was above 6%, I certainly would not have answered below 2%.

The Federal Reserve seems more concerned with the unemployment rate than inflation – despite the market talking about two Fed rate hikes in 2022 – and yet the unemployment rate is falling every month.

When I think about the type of fixed income assets that might perform well in this kind of environment, I like inflation-linked bonds and inflation-protected treasury securities because they will protect you in a to some extent when inflation rises.

The other thing that works well for me in this kind of environment is emerging market bonds. As always, there is going to be a lot of risk and volatility when investing in emerging market debt, but this probably seems like the best place for fixed income value to be right now.

We’re going to see a lot more green bonds and sustainable linked bonds over the course of 2022 and this will be a great opportunity for our funds to start buying some of these assets.

Noelle Cazalis, manager of the Rathbone High Quality Bond Fund

Inflationary pressures continue to worry the markets. Price pressures are mounting in most major economies, and we expect inflation next year to remain high, forcing central banks to keep promises to raise rates to contain inflation.

Concerns about the ability of inflation to undermine the rebound in post-pandemic growth are also growing, especially as some European countries embark on new waves of restrictions due to a surge in Covid cases .

As a result, we expect rate volatility to continue. Changes in interest rate expectations led to a sharp revaluation of the short end of the gilt curve in September – these moves provide us with opportunities to secure a higher yield.

Overall, we consider the risk associated with rate market returns to be on the upside, particularly on the long end of the curve. To help protect against these, we recently sold our longer term loan and reduced our term.

On the credit side, a moderate rise in rates should be manageable for spreads. The outlook for default is benign and collection rates have improved this year. We expect this to continue into the next year as the policy, on the whole, remains accommodative.

However, as valuations are somewhat tight, the scope for reducing spreads is limited compared to last year. Stock selection remains the key.

We continue to favor bonds issued by well-capitalized financials and which should benefit from a steeper yield curve.

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Zurich Insurance to sell Italian life and pension insurance book to Portuguese GamaLife Mon, 03 Jan 2022 08:39:25 +0000

Zurich Insurance will free up around $ 1.2 billion in capital by selling its Italian life and pension portfolio to Portuguese insurer GamaLife, the Swiss company said on Monday.

The deal will also add 11 percentage points to its Swiss solvency test ratio and significantly reduce exposure to credit risk, Zurich said.

The transaction is expected to increase Zurich’s liquidity by around $ 200 million, Zurich said, including cash consideration of around $ 148 million.

An older book consists of older fonts that remain in the books as paid fonts.

“The sale demonstrates our commitment to improving the use of capital across our entire life portfolio,” Zurich CFO George Quinn said in a statement.

“The transaction also reduces our exposure to interest rates and credit risk and allows us to focus on those segments of the Italian life and pensions market where we can best serve our clients. “

The agreement does not change contractual obligations to policyholders and distributors, said Zurich, which will continue to be active in the Italian life insurance and pension market.

The Swiss company struck a deal with Deutsche Bank to buy its network of financial advisers in Italy last year.

(Reporting by John Revill; editing by Riham Alkousaa and David Goodman)

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