Issue Brief: Insurance Sector Investments and Their Impact on Financial Stability

Issue Brief 16/1 - June 2016

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Should One Worry About Procyclicality in Insurance Investments? The empirics behind an alleged systemic pattern

Could insurers, through their common investment behaviour, impact the prices of financial instruments so much that the collective reallocation of assets may have systemic implications? In a new report, The Geneva Association endeavours to shed light on the question of whether industry-wide procyclicality could indeed be systemically relevant. Based on historical data and forward-looking stress tests, the report found the market impact of insurers' investment behaviour to be small and unlikely to cause systemically relevant distortions.

Read the full White Paper: Insurance Sector Investments and Their Impact on Financial Stability

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