“The Insurance sector has continued to show resilience from a fundamental perspective.”
Q1 2023 has been a challenging start for markets: persistent inflation, uncertainties around Central Bank rate policies and fears around bank contagion risk. The bank failure of Silicon Valley Bank (SVB) and the forced merger of Credit Suisse (CS) with UBS led to a major rout in financial markets across global financial markets. The complete write down of Credit Suisse AT1 caused much angst not only amongst holders of the CS instruments but many investors to reassess their holding in AT1 bank debt across all financials. There are fundamental differences between banks and insurers and we believe insurers to be better positioned. The insurance sector has continued to show resilience from a fundamental perspective and for Insurance Bonds any spread widening has been in line with a poorer market backdrop.