Recovery of insurers' securities portfolios
Statistical News Release
| Date | 11 December 2009 |
In the third quarter of 2009 the securities portfolios of insurance institutions continued to recover from the heavy depreciation during the first quarter. According to DNB figures, insurers’ securities holdings increased by almost EUR 12 billion to EUR 225 billion in September, due almost entirely to price gains.
Like other investors, insurers benefited from the recovery of the financial markets. Losses sustained after September 2008 were thus more than recouped after the end of March 2009. As during the second quarter, price gains occurred over a broad spectrum during the third quarter, in equities and mutual investment funds as well as bonds. As regards equities and shares-based mutual funds, this was thanks to the global recovery of equity prices. For bonds and bond-based funds, the appreciation reflected a decline in long-term interest rates. The 15-year swap rate, for instance – 15 years being the average maturity of government paper held by insurers – decreased by 14 basis points after end-June, to a level of 3.99% by end-September 2009. The rate on Dutch 10-year government paper even fell by 38 basis points. In part, this is because the risk premiums on government bonds as well as corporate bonds declined amid improved conditions in the financial markets. Price gains on bonds during the third quarter 2009 ran to EUR 4.6 billion (or 3.2% of the bond portfolio), on top of the almost EUR 2 billion gained in the second quarter.
Investors’ net securities purchases during the third quarter ran to EUR 1 billion. This reflected sales worth EUR 1 billion of mutual fund units and over EUR 2 billion in bond purchases. This figure masks sales of German, French, Italian, Spanish and other foreign government bonds, which had been purchased in fairly large quantities during preceding quarters. By contrast, purchases of Dutch government paper were stepped up during the third quarter. Purchases of Dutch bonds totalling EUR 1.9 billion during the second quarter were augmented in the third by another EUR 3.3 billion’s worth.
For further details, please contact Tobias Oudejans (telephone +31(0)20-5243100, +31(0)652496961) and Herman Lutke Schipholt (telephone +31(0)20-5242712, +31(0)652496900).
