The insurance companies that pay the best yield, which has an important aspect: Twelve –

Insurance companies should not be ignored as a defensive opportunity with full yield and potential for growth, according to Twelve Capital, while the manager believes that the changes in the market have created an attractive entry point for investors.

With global financial and capital markets instability, inflation, interest rate hikes and global volatility, the fund manager believes the insurance sector is offering real value at the moment.

Twelve Capital manages insurance and reinsurance assets, from catastrophe bonds, through collateralised reinsurance or Private-linked securities (ILS), to equities and debt instruments.

Insurance bonds, thus insurance or insurance linked to a company and sometimes debt instruments, notes or bonds, have naturally been affected by the market volatility seen in the first half of 2022.

Spreads have widened “at a record pace” in insurance bonds, just as we’ve seen in fixed income.

But Twelve Capital believes that, “In this recent period of long-term volatility, the Insurance Bond environment in Twelve Capital’s opinion has been unnecessarily punished.” Yields have also risen to historic highs, also thanks to the movement of government markets. “

This has led to spreads at “unnecessarily high rates, despite the fact that the sector has a solid foundation with the help of Solvency ratios of around 216%, which provide protection against major losses,” said the asset manager.

Dinesh Pawar, who manages Insurance Bond strategies at Twelve Capital, said, “Investing in Insurance Bonds always benefits investors who take the risks that this sector has to offer. In addition, they benefit from higher investment in one defensive sector. very much.”

To paraphrase, “Recent market changes have created one of the most important areas in the insurance industry.”

Insurance companies and revivals have shown resilience in the past crisis and social needs, as well as the number of companies with high capital, all show that with insurance bonds that are high the opportunity for investors can be meaningful.

Underscoring the reliability of this insurance sector, Twelve Capital explained that, “During the entire global financial crisis and the derivatives crisis in Europe from 2007 to 2012, only one coupon was missing for European insurers and only one insurer was suspended the return of the coupon (which was missing. was collected and paid later), according to the wisdom of the twelve.”

Currently, Twelve Capital believes that “No other sector offers a guaranteed risk reward like this,” while the insurance sector offers a yield of 5%.

The high solvency of re/insurance provides a level of “protection against large losses” that should make the sector more attractive, Twelve said.

Although the high yield makes this one of the sectors that pay the best, and twelve believe that there is some potential that they consider “important.”

“At the moment, the potential for success is profitable, because of the high yield, so the entry point will come out,” said the investment manager.

In short, “Twelve Capital believes that there is value in Insurance Bonds from good yields and fundamental ideas. In this context we believe that investors should adjust their behavior to be defensive in nature and therefore Insurance Bonds cannot be ignored.”