The investment and financial officers of global insurance companies identified inflation as the biggest macroeconomic risk this year.
According to the 'Historical turning point' report published by Goldman Sachs Asset Management on the 25th, 52% of Chief Investment Officers (CIOs) and Chief Financial Officers (CFOs) of global insurance companies responded this way in a survey (multiple responses). This marks a 10 percentage points increase from 42% the previous year.
Following that, ▲48% cited economic slowdown and recession in the United States, ▲47% noted volatility in the credit and stock markets, and ▲43% mentioned geopolitical conflicts. Additionally, 32% of respondents indicated tariff and trade conflicts.
During the next 12 months, 61% identified private credit as the asset class expected to provide the highest return. Regarding the annual return of the S&P 500 index, 83% of respondents anticipated a positive return this year.
However, half of the respondents predicted that the annual return of the S&P 500 index would be in the range of 5 to 10%, while 15% expected it to be between 10 to 20%, forecasting lower annual returns compared to 2023 and 2024. The annual returns for the S&P 500 index in 2023 and 2024 were 26% and 25%, respectively. Furthermore, 76% of respondents projected that the yield on 10-year Government Bonds would remain at the previous year's level of 4 to 5% by the end of this year.
The survey was conducted from Jan. 16 to Feb. 7, targeting 405 CIOs and CFOs of global insurance companies. The total asset size of the insurance companies they belong to is approximately $14 trillion (about 2,560 trillion won), which accounts for about half of the total assets of insurance companies worldwide.
Goldman Sachs Asset Management noted, "Respondents maintain a relatively positive outlook on the growth prospects for the United States," while also indicating that "as part of a strategy to improve risk-adjusted revenue, some insurance companies may consider investing in the Eurozone or China."