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Insurers Boost Cash as Credit Worries Build, BlackRock Says

  • Appetite for increasing risk has moderated since last year
  • Insurers are ‘struggling’ with low rates, BlackRock says
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Insurers expect to slow purchases of high-grade corporate debt and hold more cash over the next two years, potentially squeezing already low returns, BlackRock Inc. said.

“Cash balances are ticking upward,” said Zach Buchwald, head of BlackRock’s insurance asset-management business in North America. “In today’s environment, where every basis point is so precious, within your core fixed income, we want to be investing wisely and generating the best risk-adjusted returns we can, and a large cash balance doesn’t help.”