Conning Viewpoint: Commercial Real Estate Can Benefit Insurance Investment Portfolios, but Exposures at Smaller and Mid-Size Firms Trail Those of Larger Companies
August 21, 2023
A Primer on Potential Benefits of the Asset Class
HARTFORD, CT – August 21, 2023 —Leading global investment management firm Conning has posted its latest Viewpoint which discusses the potential benefits of commercial real estate (CRE) exposures for insurance company portfolios, and notes how smaller and mid-size firms trail their larger brethren in taking advantage of the asset class.
Matt Reilly, managing director in Conning’s Insurance Solutions team, documents the differences among insurers by size but notes that the potential benefits of CRE are similar for all insurance portfolios, regardless of size.
“Investors keep returning to real estate as an inflation hedge and for the benefits of diversification, competitive risk-adjusted returns, and current income” Reilly said. “Insurers may also benefit from real estate’s tax and regulatory capital treatment.”
To help educate readers about the asset class and its investment opportunities, Reilly explains its three most common property categories – core, value-add and opportunistic – and the typical components of a CRE financing structure.
“Insurers unfamiliar with real estate may be hesitant to add the asset to their portfolio mix, but Conning thinks that is a missed opportunity,” Reilly said. “Our knowledge of real estate and experience in partnering with insurers can be of significant value in helping insurers build more diversified portfolios and grow their businesses.”
To read the Viewpoint, click here.
Conning (www.conning.com) is a leading investment management firm with over $205 billion in global assets under management as of June 30, 2023.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
* As of June 30, 2023, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited (CHL) and Cathay Securities Investment Trust Co., Ltd. (SITE). SITE is a separate entity under Cathay Financial Holdings Co., Ltd which is the ultimate controlling parent of all Conning entities. The CHL CEO sits on the Board of SITE and helps oversee the business.
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