Net-zero credit: A holistic risk management solution for insurers?

We believe credit exposure can be used to seek attractive capital-adjusted returns and can help provide inherent sensitivity to interest rates to help match insurance liabilities. But can insurers also use credit to meet climate objectives without compromising on financial objectives?

Focus on climate-aware matching portfolios

2023 was the hottest year on record[1], with extreme weather events becoming far more frequent. We believe investors, including insurers, have a crucial role to play in driving the transition to a low-carbon economy and seeking to mitigating climate-related risks. We believe, two ways insurance companies can seek to exercise this power while still remaining mindful of the need for matching assets is 1) to consider a net-zero credit approach and 2) include a private credit sleeve.

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[1] Source: Climate.gov