Sustainability of large-scale portfolio rebalancing among life insurers
Key points
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Life insurers have recently intensified their portfolio rebalancing; primary objectives are improving portfolios, increasing book yield, and limiting unrealized losses
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Despite large-scale portfolio rebalancing, life insurers still holding significant amounts of low-coupon bonds, resulting in increased unrealized losses
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While dependent on market outlook and other factors, we expect continuation of portfolio rebalancing using unrealized gains from stocks as funding for now