In a survey of 307 chief insurance officers and chief financial officer, 41 percent of respondents forecast a recession in 2020 and another 41 percent believe it will occur in 2021, while 16 percent didn’t expect it to happen in the next three years and two percent think a recession is coming this year. Furthermore, slowing global growth and the reintroduction of market volatility resulted in heightened credit cycle concerns among insurers, with 85 percent of respondents believing the economy is in the late stage of the cycle—in last year’s survey, that share was 34 percent. However, only seven percent of respondents were concerned about rising interest rates, versus 30 percent last year.
"As global insurers prepare for a potential market downturn, they are taking a more selective approach to risk by decreasing allocation to public equities," said Michael Siegel, GSAM's Global Head of Insurance Asset Management, in a news release announcing the survey results. "Insurers are also shifting their asset allocation to higher returning, less liquid asset classes such as private equity in order to avoid exposure to the increased volatility as speculation around a recession continues to rise."