What do insurance asset managers make of the digital and crypto assets markets? This was evaluated in a recent independent survey by Laser Digital, Nomura’s digital asset subsidiary.
The global survey collected the views of insurance asset managers, who collectively manage about $273.5 billion, on a range of topics including their plans to invest in the digital and crypto assets markets, and the hurdles they must overcome to do so.
Among the key findings, it was revealed that 100% of the insurance asset managers interviewed see digital assets as representing an investment diversification opportunity alongside traditional asset classes such as fixed income, cash, equities and commodities.
The insurance asset managers interviewed said they would like to see digital assets more closely integrated with traditional assets, with 86% of those surveyed saying they want to see digital assets combined with other traditional asset classes to produce ‘all-weather’ income strategies.
All of those surveyed emphasised the importance of having the backing of a large traditional financial institution for any digital asset fund or investment vehicle before they or their clients would invest. 79% of respondents said they are positive about the digital asset class in general – and Bitcoin and Ethereum in particular over the next 12 months. Just 7% of respondents said they were negative about the outlook while 14% professed themselves as neutral.
Fifty percent of respondents said that their and/or their clients’ total percentage exposure to digital assets will stand between 2% and 5% over the next three years. Meanwhile, 43% expect this to be between 5% and 10%.
Among the challenges identified by the insurance asset managers, it was revealed that:
• Fifty-seven percent of those interviewed pinpointed legal or regulatory restrictions that could prevent their fund or clients investing in a product that references exposure to digital assets.
• Most insurance asset managers would have to make regulatory filings or notifications as a result of holding or investing in financial instruments focused on digital assets. While 71% of those surveyed cited this as an issue, 29% said they are confident they would not need to make regulatory filings or notifications.
• Around 79% say they are aware of regulatory filings or notifications that the issuer of digital financial instruments must make as a result of investors holding or investing in their financial instruments.
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