Asia insurers look to asset diversification, new product designs to weather higher interest rates

INSURERS in Asia are diversifying their portfolios into other asset classes and redesigning their insurance products amid rising interest rates, market watchers said.

Shorter-term, higher-quality fixed income can now provide higher returns due to the rising interest rates environment. Nevertheless, insurers typically hold longer-term assets to match their longer-term liabilities.

In a March report, asset manager DWS noted that the low interest rate environment saw insurance companies increasing their investment risk to get a decent yield.