Risk parity investment strategies present opportunities for insurers

The risk parity approach to investment is growing in popularity, particularly in the US. Charlotte Moore examines how insurers might use the concept in their asset allocation strategies

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The introduction of Solvency II in 2014 will have an impact on many aspects of the insurance industry. From an investment management perspective, however, an interesting ramification of the new European directive is the emphasis it places on the use of diversification to manage risk.

But it is not only Solvency II that is pushing risk management much higher up the agenda and making insurers examine the design of their asset portfolios. As Dirk