@Generali Investments.
The evolving market dynamics of 2025 are set to redefine the landscape for insurance portfolios, with diverging monetary policies, rising geopolitical risks, and the increasing importance of energy transition risk at the forefront.
In this outlook, the LDI investment team at Generali Asset Management, part of the Generali Investments platform, explores strategic approaches to address these challenges, from optimising duration and spread management under Solvency II to leveraging private assets for enhanced yields and stability.
The recent transatlantic spread widening reflects divergent US and Euro Area economic paths, creating opportunities in euro government bonds and credit curve steepening.
• LDI portfolios must balance duration and spread duration positioning. Assessing the right entry level on credit and rates, while looking at opportunistic tactical hedging will be key for yield enhancement and Solvency II compliance.
• Rising geopolitical risk in the Euro Area suggests diversified sovereign strategies and alignment with EIOPA portfolio metrics to ensure solvency stability.
• Transitioning to low-carbon investments will mean balancing ESG opportunities with legacy high-carbon yields amid evolving Solvency II regulations.
• Private assets continue to offer stable income and diversification, provided careful due diligence and expertise to mitigate risks and optimise returns.
