Executive Summary Enterprise based asset allocation (EBAA™) considers the joint implications of an insurer’s exposure to capital market and insurance market expectations to formulate investment strategies. This discussion builds on Part One of this two-part series where we previously discussed how EBAA™ analysis supported strategic choices regarding investment portfolio sector, duration, and credit quality of U.S. Property & Casualty (P&C) insurers. We discussed how these choices differed as monetary policy shifted from an accommodative focus in 2021 to a restrictive focus in 2023. In Part Two, we extend this discussion and explore how EBAA™ outcomes and preferences were considered given implications for realizing gains or losses and net income.
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The NEAM Vantage Point series of publications delivers actionable insights to insurance executives by covering a wide range of investment and capital markets topics relevant to the insurance industry.