Annual Report 2007

Investment outlook

The outlook for investment markets is perhaps the most difficult area of our business to predict. Our defensive portfolio protected us from the worst effects of the financial markets in 2008. On average 64.4% of our assets were invested in government bonds or cash. With interest rates at historic low levels the return potential from these classes of asset is now less attractive.

Risk assets remain volatile and the non government bond market continues to suffer from liquidity issues. Liquidity is an important factor in our investment decisions because of the catastrophe nature of much of our business. Therefore, we expect to slowly increase our allocation to non government bonds during 2009, with a focus on higher grade credits and taking advantage of the attractive yields currently available. In the short term our equity exposure will remain at low levels.

 Print

© Copyright Amlin 2009