iSHARES INSURANCE HUB

According to Institutional Investor’s latest research report, 65% of institutions plan to increase use of ETFs in the next 18 months, outpacing derivatives (62%), mutual funds (59%), and other instruments. A portfolio manager at an insurance company stated: “The early months of the pandemic presented some case studies in how they [ETFs] reacted in a less than ideal liquidity environment. Coming out of that, we have significant balances to invest in that bucket of the portfolio — cash and, in the medium term, fixed income. That’s where we see the most opportunity to expand our ETF usage going forward.”

* Source: Institutional Investor, Managing Market Volatility in 2020, January 2021. Based on 766 respondents. Usage figures comes from a global survey of institutional investment decision makers at insurers, endowments, family offices, foundations, pensions, and asset management firms surveyed in Q3, 2020. This study was sponsored by BlackRock. BlackRock is not affiliated with Institutional Investor or any of their affiliates.

The big shift: ETFs at the cornerstone of insurance equity portfolios

BlackRock's latest paper for insurance companies examines the growing role public equities play in investment portfolios.

Volatility accelerates adoption of fixed income ETFs by insurers

See how insurance companies turned to fixed income ETFs during the COVID crisis to help navigate the most challenging markets since the Global Financial Crisis.

Primed for Growth: Bond ETFs and the path to $2 trillion

Bond exchange traded funds (ETFs) are transforming how investors can access fixed income. BlackRock believes that global bond ETF assets are well positioned to double, to $2 trillion, by the end of 2024.* This paper highlights four key trends that BlackRock believes will drive this growth.

* BlackRock (as of June 2019)

iShares NAIC-designated ETFs

iShares offers around 70 National Association of Insurance Commissioners (“NAIC”) designated fixed income ETFs.*

NAIC-designated ETFs may help insurers:

  • By allowing more favorable Risk-Based Capital (“RBC”) treatment
  • By allowing them to consider ETFs as “Long-term Bond Issuer Obligations” as opposed to “Common Stock” on the statutory (Schedule D) filings
  • Maintain lower capital requirements to back investments

View NAIC-designated funds

* The NAIC does not endorse or recommend any securities or products, including iShares ETFs. NAIC designations are issued for specific regulatory purposes and these designations are not equivalent to credit ratings issued by nationally recognizedstatistical rating organizations. NAIC designations are suitable only for NAIC members. For additional information, please refer to www.naic.org.

“Systematic Value” calculation for fixed income ETFs

The Systematic Valuation method, as recently adopted by the NAIC, provides a solution that is both relatively simple to calculate and auditable.

Systematic Value Methodology for FI ETFs

In order to examine how the Systematic Value approach would work over time, a hypothetical example using the iShares investment grade corporate bond is explored.