BlackRock Finds Insurance Industry Riskier Than in 2008

The transcript discusses the complexity of investment strategies in a low yield environment. BlackRock argues that diversifying into alternative assets can mitigate concentrated risks. Insurers like MetLife and Prudential are exploring commercial property and private market debt for better yields. BlackRock's study, using their Aladdin platform, assesses asset performance under various scenarios, including a 2008-like crisis. The study highlights the importance of diversification and the potential benefits of illiquid investments.

Why does BlackRock believe that diversifying into alternative assets is beneficial?

• It helps in concentrating risk in one area.

• It eliminates the need for traditional investments.

• It increases the overall risk of the portfolio.

• It diversifies the portfolio, reducing concentrated risk.

What investment strategy are traditional insurers like MetLife and Prudential Financial adopting?

• Investing solely in government bonds.

• Focusing on high-risk stocks.

• Pushing into commercial property and private market debt.

• Avoiding any form of risky investments.

What challenge are insurers facing in a low-interest rate environment?

• Locating new sources of yield.

• Finding high-yield bonds.

• Reducing their investment portfolios.

• Managing excessive liquidity.

What is the purpose of BlackRock's study on insurance asset management?

• To eliminate the need for insurance companies.

• To assess and model assets using the Aladdin platform.

• To focus solely on traditional investment methods.

• To increase the number of bonds in portfolios.

How does BlackRock use the Aladdin platform in their study?

• To predict future stock prices.

• To focus on short-term market trends.

• To assess and model every single asset against different scenarios.

• To eliminate the need for diversification.