Gareth Mee, chief investment officer for both Legal & General’s assurance society and institutional retirement division, is the guest for this episode of The Professional Investment Podcast. His news story of the week is LCP’s forecasting up to £550bn in buy-ins over the next decade.
We discuss how these vast capital flows are attracting new market entrants with private equity firms snapping up L&G’s competitors while others, such as Phoenix Group, are looking to raise more capital. We also examine whether run-on is a realistic option or likely to be a reality for only a few paternalistic schemes with finance directors unscared by DB trauma.
CIOs at insurers will have their work cut out for them over the next decade as they look to invest that £55bn a year. Gareth explains why he prefers sovereign to corporate debt and how insurers can avoid over-inflating asset prices in the face of such significant capital flows.
We talk about how insurers are innovating to broaden their investment universe into asset classes that might otherwise not sit well in their regulatory framework – and how they avoid taking this too far. Gareth says he most excited about investing in emerging and frontier markets.
We examine how insurers manage their sustainability risks. As providers of hurricane and flood insurers, these organisations are at the sharp end of climate change and need to ensure these risks are balanced in the assets they invest in. We discuss how insurers are thinking about a nascent asset class like natural capital.
We debate whether insurers are neglecting the development of deferred annuities for the DC as they are too distracted by the buy-out bonanza. Gareth addresses the frustrations felt by those looking to develop retirement income for workplace pensions.
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