Insurers in the Netherlands continued to sell direct investments in bonds in 2023, new figures from DNB show. For the fourth year in a row, insurers sold more bonds than they bought. Price gains on investments and derivatives caused insurers' total assets to increase in 2023, after a sharp decline in the preceding year.
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On balance, Dutch insurers sold €1.5 billion in bonds in 2023. In the preceding two years, their bond sales totalled €36 billion. A large portion of the sales involved ‘safe’ sovereign bonds, such as those issued by Germany (€12 billion) and the Netherlands (€5 billion).
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The sizeable net sales seen in 2021 and 2022 were meant in part to free up funds to meet the margin requirements that had gone up. But insurers also used the proceeds to purchase other investments, such as mortgages and investment fund units.
In turn, these investment funds invest in other assets, such as shares and participating interests (around 40%), real estate (20%), as well as bonds (20%). These bonds are often higher yielding bonds that also carry higher risks. These can be both corporate and government bonds.
Apart from bond sales, the value of bonds in specifically the insurers' investment portfolios increased less than shares and investment fund units in 2023. In 2021 and 2022, the value of bonds fell more sharply than that of shares and units.
Combined with bond sales, this has caused the proportion of bonds in insurers' aggregate investment portfolio to fall sharply in recent years. Whereas in 2019, 45% of their assets were allocated to bonds, this had fallen to 32% by the end of 2023.
In 2023, insurers' assets increased by €25 billion to €445 billion, whereas 2022 showed a strong decrease of €91 billion. The year 2023 therefore saw some recovery. Insurers' assets increased mainly due to price gains on shares and investment fund units (€10 billion), bonds (€5 billion) and derivatives (€4 billion).
Counterbalancing these assets are insurers' liabilities, consisting mainly of future obligations to their policyholders. These increased by €18 billion in 2023. Insurers' own funds, according to macroeconomic definitions, therefore increased by €7 billion.
Table 7.1.1BC Summary balance sheet of insurance corporation by type
Table 7.1BC: Insurance corporations balance sheet
Table 7.1.3 Cash flow statement of insurance corporations
Dashboard: Insurers (New, including supervisory and macroeconomic statistics on insurers)
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