GSAM Insurance Survey - Too Much Capital, Too Little Return - GSAM INSURANCE ASSET MANAGEMENT
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Too Much Capital, Too Little Return
GSAM
Insurance
Survey
GSAM INSURANCE ASSET MANAGEMENT
Michael H. Siegel, PhD Farzana Morbi
Managing Director, Global Head Vice President, Investment Strategist APRIL 2015TABLE OF CONTENTS I. Executive Summary 3 II. GSAM Insurance Survey Background 4 III. Introduction to Survey and Key Findings 6 IV. Investment Environment 8 V. Asset Returns and Allocation Decisions 13 VI. Capitalization and Regulatory Capital 20 VII. Outsourcing 22 VIII. Conclusion 23 The authors would like to thank Nina Onsager for her significant contributions.
GSAM Insurance Asset Management Insurance Survey
I. Executive Summary
Finding attractive investment opportunities has become a familiar challenge in a world of low to
negative yields, tight spreads, and high equity prices. This year insurers demonstrated the
greatest pessimism since we first began conducting the survey four years ago. Insurers believe
the industry is adequately or over-capitalized (“too much capital”), but that investment
opportunities are deteriorating (“too little return”). Our 2015 GSAM Insurance Asset
Management Survey received participation from 267 Chief Investment Officers (CIOs) and Chief
Financial Officers (CFOs), representing over $6 trillion in global balance sheet assets.
Despite the bearish sentiment on the investment environment, approximately one-third of
insurers globally are looking to increase overall portfolio risk. EMEA and Pan Asian insurers
demonstrated strong risk appetite this year. EMEA insurers have increased their risk appetite
over the years and this year they intend to take more liquidity risk, while Pan Asian insurers are
looking to increase credit and equity risk. The majority of Americas-based insurers intend to
maintain their overall risk level.
Insurers are concerned about the pace of US economic growth and consider it to be the
greatest macroeconomic risk. CIOs and CFOs believe the US dollar will continue to strengthen
due to a relatively stronger economy and relatively higher interest rates. Higher rates are critical
for insurers to improve returns, but after yields moved lower in 2014, contrary to expectations,
and central banks expanded “QE” programs, insurers are not anticipating a meaningful increase
in rates this year. One-third of insurers now believe we have moved into the late stages of the
credit cycle with deteriorating credit quality conditions.
Despite years of unprecedented global monetary easing, insurers have become more
concerned about deflation due to slow global growth and lower commodity prices. Insurers are
not expecting a meaningful increase in oil prices this year, and they anticipate commodities will
be amongst the lowest returning asset classes. The last time insurers indicated this level of
concern around deflation was in 2012 when they were anxious about the European debt crisis.
Similar to previous years, insurers have pushed out concerns about rising inflation to the
medium term.
Equity assets are anticipated to outperform credit assets this year, but insurers have more
modest expectations for US public equities relative to last year’s returns. Insurers are looking to
less liquid, private asset classes to bolster returns, and intend to increase allocations to
commercial mortgage loans, infrastructure debt, private equity, middle market loans and real
estate equity. Negative sovereign yields are leading EMEA and Pan Asian companies to diversify
into US investment grade corporates, an asset class insurers have not demonstrated strong
incremental demand for since 2012.
Goldman Sachs Asset Management | 3GSAM Insurance Asset Management Insurance Survey
II. GSAM Insurance Survey Background
MARKET ENVIRONMENT
Global financial markets were relatively benign last year with low volatility as equities and bonds
delivered strong returns. This year started with higher volatility as headlines were dominated by
falling oil prices and unanticipated aggressive central bank actions. Asset correlations increased
as risk assets sold off broadly. The global oil market is currently facing an oversupply as the US
is producing higher levels of oil, and OPEC, concerned about losing market share, has not cut
production. Demand growth has slowed due to weak economic growth in Europe, Japan and
China. The overall economic impact of lower oil prices is positive for the largest global
economies given the US, China, Japan and Eurozone are net oil importers.
Developed market central banks are pursuing divergent monetary policies as developed
economies demonstrate differing growth trajectories. The US economy is on an upswing with a
strong labor market supporting a housing recovery. Many investors anticipate the Fed will
tighten in the second half of 2015, though weaker commodity prices have contributed to low
inflation. The US dollar continues to strengthen, and rising wealth and falling oil prices are
supportive of higher consumer spending which accounts for approximately 70% of US GDP.1
Euro area GDP growth has picked up, particularly in Germany and Spain, and business
confidence is improving. The ECB is committed to quantitative easing with its €60 billion
monthly purchases from March 2015 to September 2016. The program is focused on supporting
growth in the region but an easy monetary policy will likely further weaken the euro. Greece
reached an agreement with European leaders to extend the bailout, leading to a temporary
reprieve to the question of a Greek exit. In January, the Swiss National Bank surprised the
market with the removal of the exchange rate floor leading to a substantial appreciation of the
Swiss Franc.
Japan’s economy is benefiting from lower oil prices and is experiencing a recovery in consumer
confidence. The impact of Abenomics remains to be seen, but Japanese corporate profitability
has improved. A weaker yen has benefited Japan’s export-oriented economy.
Emerging market economies are still growing faster than developed market economies, albeit
below recent trends. India made a surprise interest rate cut which has supported equities, and
investors generally view Modi’s leadership favorably. S&P downgraded Russia’s foreign currency
rating to below investment grade due to economic deterioration following sanctions that were
implemented as a result of the conflict with Ukraine. In China, lower oil prices, a housing market
correction and sluggish demand growth have led the central bank to cut rates.
1
World Bank data as of 2013.
4 | Goldman Sachs Asset ManagementGSAM Insurance Asset Management Insurance Survey
INSURANCE OPERATING AND REGULATORY ENVIRONMENT
US Life insurers began the year well-capitalized with strong balance sheets resulting from
favorable equity and credit markets throughout 2014. Pan Asian insurers are experiencing strong
premium growth. European Life insurers are facing a more difficult environment with low to
negative interest rates in addition to preparing for implementation of Solvency II.
US P&C insurers have utilized share repurchases and dividends to redeploy growing capital
levels. Although the P&C industry is faced with increasing competition and slower premium
growth, the sector is expected to maintain underwriting profits. The pricing environment
continues to soften in the reinsurance market due to an influx of alternative capital. As a result,
M&A activity has picked up and is expected to gain momentum throughout the year.
Insurers globally are facing increased regulatory requirements as international and national
frameworks continue to evolve. In Europe, Solvency II will go into effect on January 1, 2016.
Given a 16 year transition period to fully implement certain components of the directive, the
impact on European insurers is not expected to be severe. The European Insurance and
Occupational Pensions Authority (EIOPA) stress test results indicate insurers are generally
sufficiently capitalized under the Solvency II regime. Asian insurers are broadly moving towards
regulatory standards similar to Solvency II or aligned with global Insurance Core Principles
(ICPs). In the US, as part of the Solvency Modernization Initiative (SMI), insurers are required to
file their Own Risk and Solvency Assessment (ORSA) reports beginning in 2015 to internally
assess their ability to withstand financial stress. ORSA is an additional tool to the Risk Based
Capital framework, and may create the need for insurers to alter product offerings and risk
management policies based on their results.
Goldman Sachs Asset Management | 5GSAM Insurance Asset Management Insurance Survey
III. Introduction to Survey and Key Findings
SUMMARY OF SURVEY RESPONDENTS
GSAM Insurance Asset Management continued its partnership with KRC Research, an
independent research provider. The survey provides valuable insights from insurance CIOs and
CFOs regarding the macroeconomic environment, return expectations, asset allocation decisions,
portfolio construction and industry capitalization. We received responses from 208 CIOs, 48 CFOs
and 11 individuals who serve as both the CIO and the CFO. This year our survey included
insurance companies that invest over $6 trillion in global balance sheet assets. The participating
companies represent a broad cross section of the global insurance industry in terms of size, line
of business and geography. The table below summarizes the profile of respondents.
Respondent Profile
Type CIO CFO Both Total
Life 74 15 5 94
P&C / Non-Life 66 24 4 94
Multi-Line 40 4 1 45
Health 16 2 0 18
Reinsurance 12 3 1 16
Total 208 48 11 267
Region CIO CFO Both Total
Americas 127 25 3 155
EMEA 43 18 7 68
Pan Asia 38 5 1 44
Total 208 48 11 267
KEY FINDINGS
Investment Opportunities
This year insurers demonstrated the most pessimism regarding investment opportunities as the
vast majority believes investment opportunities are getting worse. This is a significant increase
in negative sentiment from previous years.
Macro Risks
Insurers are most concerned about US economic growth, credit and equity market volatility and
deflation. Insurers believe China, Russia and the US have the greatest potential to unexpectedly
roil global financial markets.
Market Outlook
Market expectations are tempered. After rates moved lower in 2014 contrary to expectations,
most insurers do not anticipate a meaningful rise in rates in 2015. The majority of survey
respondents believe the 10-Year US Treasury yield will be between 2.0-2.5% at year-end, while
almost one-third believe it will be between 2.5-3.0%.
Most insurers hold the view that the US dollar will appreciate relative to other major currencies
with the exception of the Swiss Franc.
There is strong consensus on the trajectory of public equities and oil prices among insurers.
Most believe equities will return between 0-10%, and oil prices will be range-bound between
$50-$75 per barrel.
The majority of insurers believe we are in the middle stage of the credit cycle with stable credit
quality and do not anticipate major movements in the credit markets. One-third of insurers think
we have now entered the late stage of the credit cycle with deteriorating credit quality.
6 | Goldman Sachs Asset ManagementGSAM Insurance Asset Management Insurance Survey
Deflation/Inflation
Deflation concerns have reemerged but expectations are fairly barbelled. More than one-third of
insurers believe deflation will be a concern in their domestic market over the next year, while
more than 40% believe deflation will not be a risk within the next five years.
Near term concern around inflation remains muted as most believe inflation will be a risk in the
next 2-5 years.
Investment Risk
Approximately one-third of insurers globally are looking to increase overall portfolio risk, while
the majority intends to maintain current risk levels. EMEA and Pan Asian insurers demonstrated
strong risk appetite this year. EMEA insurers intend to take more liquidity risk, while Pan Asian
insurers intend to increase credit and equity risk.
Low yields continue to pose the greatest portfolio risk for the majority of insurers.
Asset Class Return Expectations
Equity asset classes are broadly expected to outperform credit asset classes. Private equity, US
equities and European equities are anticipated to be the highest returning asset classes.
Insurers have the lowest return expectations for cash/short-term instruments, government and
agency debt and commodities.
Asset Allocation Decisions
Insurers globally intend to increase allocations to less liquid assets. The top four asset classes
are all private: commercial mortgage loans, infrastructure debt, middle market corporate loans
and private equity.
Consistent with their return expectations, insurers intend to decrease allocations to cash/
short-term instruments and government and agency debt.
Impact of Regulatory Capital on Asset Allocation
Most insurers believe their industry is either adequately or over-capitalized.
A significant percentage of EMEA and Pan Asian insurers stated they are more likely to allocate to
long duration bonds due to regulatory capital treatment. This is likely a result of insurers focusing
on duration matching under Solvency II and its equivalents as duration mismatches are penalized.
Outsourcing
Insurers are looking to outsource investments in hedge funds, emerging market equities, US
investment grade corporates, private equity and middle market loans.
SURPRISING FINDINGS
• This year insurers demonstrated the most pessimism regarding investment opportunities as most
believe investment opportunities are getting worse.
• Insurers are not anticipating a significant move in interest rates. The vast majority believes the 10-Year
US Treasury yield will not exceed 3.0% by year-end.
• Insurers believe oil prices will remain range-bound at $50-$75 per barrel.
• One-third of insurers believe we have now entered the late stage of the credit cycle with deteriorating
credit quality.
• Although credit spreads continue to tighten and equity markets continue to move higher, approximately
one-third of insurers globally are looking to increase overall portfolio risk.
• EMEA and Pan Asian insurers demonstrated strong risk appetite this year. EMEA insurers intend to
take more liquidity risk, while Pan Asian insurers intend to increase credit and equity risk. Both EMEA
and Pan Asian insurers expressed demand for European equities.
• As EMEA and Pan Asian companies face low to negative sovereign yields, they plan to diversify into US
investment grade corporates, an asset class insurers have not demonstrated strong incremental
demand for since 2012.
Goldman Sachs Asset Management | 7GSAM Insurance Asset Management Insurance Survey
IV. Investment Environment
The ultra-low yield environment continues to be a challenge, and insurers demonstrated more
pessimism than in previous years regarding investment opportunities. Insurers are worried
about the potential impact of slower growth in the US, market volatility and deflation. They are
also concerned about the unanticipated impact China and Russia can have on global financial
markets. Deflation has returned as a concern due to the impact of lower oil prices and slower
global growth. Despite years of global monetary easing, most insurers have pushed out their
inflation concerns to the medium term, a theme we have seen over the last few years.
Insurers are optimistic about the strength of the US dollar relative to other currencies with the
exception of the Swiss Franc, but have softened their expectations for the 10-Year US Treasury
yield relative to last year. The vast majority of insurers do not expect the 10-Year yield to move
higher than 3.0% this year. Most insurers are not anticipating a significant move in credit
spreads, which highlights the difficulty of finding attractive investment opportunities. While most
insurers believe we are in the middle of the credit cycle, approximately one-third believe we
have entered the late stage of the credit cycle with deteriorating credit quality conditions.
Insurers are more optimistic about public equities and anticipate moderate returns. With the
current oversupply in oil markets, most insurers expect oil prices to remain range-bound at
$50-$75 per barrel. Oil price volatility may create attractive investment opportunities, and
insurers view private equity/distressed strategies and high yield debt as the best strategies to
exploit the market dislocation.
Regulatory changes including Basel III and Dodd Frank have impacted market liquidity
conditions. Approximately one-third of insurers are concerned about the impact that
deteriorating liquidity conditions will have on their investment portfolios, a concern that is
particularly concentrated in Asia.
INVESTMENT OPPORTUNITIES
This year insurers demonstrated the greatest amount of pessimism regarding
investment opportunities since we first began conducting the survey
• The majority of insurers believes investment • EMEA-based insurers are particularly bearish as
opportunities are getting worse (63%), while 74% believe investment opportunities are
only 9% believe opportunities are improving. getting worse. This is understandable given
sovereign yields in Europe are moving further
into negative territory.
Overall, do you feel that investment opportunities compared to a year ago are improving,
getting worse or staying the same?
Year Over Year (%) 2015 by Region (%)
74
66
63
58
48
43
38 39
34
31 30
28 27
26 25 24
14 12
9 7
3
Improving Staying the Same Getting Worse Improving Staying the Same Getting Worse
2015 2014 2013 2012 Americas EMEA Pan Asia
8 | Goldman Sachs Asset ManagementGSAM Insurance Asset Management Insurance Survey
MACRO RISKS
• Insurers identified slower US economic growth • Insurers demonstrated a regional bias. Nearly
(23%), credit and equity market volatility (19%) 60% of Americas-based insurers selected slower
and deflation (17%) as the greatest US economic growth as a top three macroeco-
macroeconomic risks. nomic risk; 75% of EMEA-based insurers
selected an economic slowdown/sovereign crisis
• Nearly half of insurers globally (47%) identified
in Europe as a top three macro concern.
an economic slowdown or a sovereign crisis in
Europe as a top three macroeconomic risk. • Insurers believe the economies with the greatest
potential to unexpectedly roil the markets are
China (36%), Russia (24%) and the US (23%).
Which of the following issues pose the greatest macroeconomic risk to your investment
portfolio? Please select and rank your top 3.
2015 Macroeconomic Risks % Ranked First Choice % Total Ranked (1-3)
Slower-than-Expected US Economic Growth 23 51
Credit & Equity Market Volatility 19 53
Deflation 17 43
Economic Slowdown/Sovereign Crisis in Europe 15 47
Acceleration of Monetary Tightening 13 31
Economic Slowdown In Emerging Markets and China 5 24
Inflation 5 15
Deteriorating Liquidity Conditions 3 30
Volatile Energy Prices 0 7
In your opinion, which economy will have the greatest unanticipated impact on global
2014 Macroeconomic Risks % Ranked First Choice % Total Ranked (1-3)
financial markets in 2015? (%)
Credit and Equity Market Volatility 19 61
China 36
Slower-than-Expected US Economic Growth 15 47
Russia 24
Acceleration of Monetary Tightening 15 44
United States 23
Economic Shock in Emerging Markets and China 15 41
Greece 6
Deflation 13 27
Japan 6
Inflation 10 28
2
USUnited Kindgdom
Financial Market Regulatory Change 6 14
US Fiscal Venezuela
Issues 2 5 17
Slow Growth in Europe 2 9
European Financial Market Regulatory Change 2 11
Goldman Sachs Asset Management | 9GSAM Insurance Asset Management Insurance Survey
MARKET OUTLOOK
Insurers have tempered their rate expectations and approximately one-third believe
we are in the late stage of the credit cycle
• Rates: The majority (52%) believes the 10-Year • Oil Market Dislocation: Insurers view dis-
US Treasury yield will be between 2.0-2.5% at tressed debt/ private equity energy funds (37%)
year-end, while 31% believe it will be between or energy high yield debt (29%) as the best
2.5-3.0%. strategies for capitalizing on the energy market
dislocation. P&C insurers demonstrated a
• Currencies: Most insurers believe the US dollar
preference for energy high yield debt (39%),
will appreciate relative to other major currencies
while Life and Multi-Line companies showed a
with the exception of the Swiss Franc, which
preference for distressed debt/private equity
56% anticipate will strengthen relative to the US
strategies (43% and 49% respectively).
dollar. 87% of insurers believe the Euro will
depreciate relative to the US dollar. • Credit Cycle: Most insurers believe we are in
the middle of the credit cycle with stable credit
• Equities: There is significant consensus around
quality (62%), while approximately one-third
return expectations for equities, with 76%
believe we are in the late stage of the credit
expecting equities to return between 0-10%.
cycle with deteriorating credit quality (33%).
• Oil Prices: Insurers broadly (81%) believe Brent
• Credit Spreads: Most insurers expect a modest
crude oil will remain within the range of $50-$75
tightening or modest widening (56%), with a large
per barrel.
percentage expecting a moderate widening (43%).
Where do you expect the 10-Year US Treasury yield will be at year-end 2015? (%)
2015
56
2014 52
31 31
13
5 4 6
1 0 0 0
2.0% or Less > 2.0 to 2.5% > 2.5 to 3.0% > 3.0 to 3.5% > 3.5 to 4.0% > 4.0%
Do you believe the following currencies will appreciate or depreciate relative to the
US dollar? (%)
10-Year US Treasury Yield 2015 vs. 2014 Depreciate (%) Appreciate (%)
Chinese Yuan 68 32
Euro 87 13
Japanese Yen 84 16
UK Sterling 64 36
Swiss Franc 44 56
What do you expect the 2015 total return will be for the S&P 500 Index? (%)
76 75
2015
2014
18
11 10
6
1 0 2 1 0 0
-20% or Less > -20 to -10% > -10 to 0% > 0 to 10% > 10 to 20% > 20%
10 | Goldman Sachs Asset Management
S&P 500 Index Total Return 2015 vs. 2014GSAM Insurance Asset Management Insurance Survey
Where do you expect Brent crude oil (USD/bbl) will be at year-end 2015? (%)
81
14
5
1 0
$25 or Less > $25 to $50 > $50 to $75 > $75 to $100 > $100
Brent
In Crude
your Oil Price
opinion, (USD/bbl)
which asset class or strategy is the most attractive for capitalizing on the
dislocation in energy markets? (%)
37
29
18
16
Distressed Debt/ Energy Public Equity/ Commodities
Private Equity High Yield Debt Master Limited
Energy Fund Partnerships (MLPs)
62
Where do you think we are in the credit cycle? (%)
62
33
33
5
Early Stage
5 - Middle Stage - Late Stage -
Improving Stable Deteriorating
Credit Quality Credit Quality Credit Quality
Early Stage - Middle Stage - Late Stage -
Improving Stable Deteriorating
Credit Quality Credit Quality Credit Quality
What do you think will happen to credit spreads in 2015? (%)
56
43
56
43
1
Modestly Tighten Moderately Significantly
to Modestly Widen 1
Widen
Widen
Modestly Tighten Moderately Significantly
to Modestly Widen Widen
Widen
Goldman Sachs Asset Management | 11GSAM Insurance Asset Management Insurance Survey
INFLATION/DEFLATION
Deflation concerns have reemerged but expectations are fairly barbelled
• 35% of insurers believe deflation will be a believe it will be a risk in their domestic market
concern in their domestic market over the next in the next 2-5 years.
year, while 43% do not believe deflation will be
• Americas-based insurers (48%) and P&C
a risk within the next five years.
insurers (51%) are less concerned about
• Inflation concerns are muted. Similar to previous deflation and do not view it as a risk over the
years insurers have pushed out their concerns next five years.
to the medium term with 70% indicating they
When do you expect inflation/deflation will be a concern in your domestic market?
Inflation (%) Deflation (%)
60
47
43
40
35
30 31
26
21
19
15 16
7
4 3 4
In the 2-3 3-5 Will Not Be In the 2-3 3-5 Will Not Be
Next Year Years Years a Risk in the Next Year Years Years a Risk in the
Next 5 Years Next 5 Years
2015 2014
Deflation will be a concern in the next year
Year Over Year (%)
35
28
21
10
2012 2013 2014 2015
12 | Goldman Sachs Asset ManagementGSAM Insurance Asset Management Insurance Survey
LIQUIDITY CONDITIONS
• Approximately one-third (34%) of insurers • More than half (55%) of Pan Asian insurers
believe deteriorating liquidity conditions will believe deteriorating liquidity conditions will
impact their investment portfolio, while nearly impact their portfolio.
half (49%) do not believe it will have an impact.
Do you think deteriorating liquidity conditions will have a significant impact on your
investment portfolio?
Global (%) Region (%)
59
55
18%
43
Yes
34%
No 34
28
Do Not Believe 24 23
23
Liquidity Conditions
49% Are Deteriorating 14
Yes No Do Not Believe
Liquidity Conditions
Are Deteriorating
Americas EMEA Pan Asia
V. Asset Returns and Allocation Decisions
Approximately one-third of insurers globally are looking to take on more investment risk, while
the majority intends to maintain current risk levels. EMEA and Pan Asian insurers demonstrated
strong risk appetite this year as they face low to negative sovereign yields. EMEA-based
insurers have increased their risk appetite over the years and are looking to take more liquidity
risk, while Pan Asian insurers are looking to increase both credit and equity risk. Most insurers
believe their industry peer group is taking on the appropriate amount of investment risk.
Similar to 2014, insurers expect equity asset classes to outperform credit asset classes. Insurers
have the lowest return expectations for cash/short-term instruments and government and agency
debt, and intend to decrease allocations accordingly. After months of volatile and declining oil
prices, insurers also expect commodities to be one of the lowest returning asset classes this year.
Insurers globally demonstrated strong demand for less liquid, private assets including
commercial mortgage loans, infrastructure debt, middle market loans, private equity and real
estate equity. There are notable differences by region with regards to asset allocation. Americas-
based insurers demonstrated the greatest appetite for commercial mortgage loans, private
equity, middle market loans, US securitized credit and infrastructure debt. EMEA insurers intend
to increase allocations to infrastructure debt, European equities, middle market loans, real
estate equity and US investment grade corporates. Pan Asian insurers intend to make the
greatest net allocations to infrastructure debt and US investment grade corporates, followed by
private equity, European equities and infrastructure equity.
Insurers cited valuations of both commercial mortgage loans and infrastructure debt as reasons
for not executing on their intended allocations from last year. The commercial mortgage loan
market is facing increasing competition from the CMBS market which has recently pressured
yields. Infrastructure debt, while attractive for its long duration, faces strong demand and muted
supply. Insurers also noted that the lack of internal systems or personnel has deterred
investments in both commercial mortgage loans and infrastructure debt.
Goldman Sachs Asset Management | 13GSAM Insurance Asset Management Insurance Survey
INVESTMENT RISK
Most insurers believe their industry peer group is taking the appropriate amount of
investment risk
• The majority of insurers surveyed (66%) (66%), while 21% believe the industry is taking
consider low yields to be the greatest invest- too much risk, a sentiment that is more concen-
ment risk to their portfolio, followed by rising trated amongst Multi-Line insurers (40%).
interest rates (12%).
• EMEA insurers hold dispersed views on
• EMEA-based insurers and P&C insurers investment risk; 29% believe their peer group
expressed slightly greater concern about rising is taking too much risk, 50% believe their risk
interest rates (19% and 20% respectively) level is appropriate and 21% believe their risk
relative to their peer groups. level is insufficient.
• Most insurers believe their industry peer group is • 70% of P&C insurers believe their peer group is
taking the appropriate amount of investment risk taking on the appropriate amount of risk.
Please select the investment risk that you are most concerned about. (%)
66
Low Yields 70
57
68
12
Rising 10
Interest Rates 19
7
10
Credit Spread 8
Widening 15
14
6
Equity Market 7
Volatility 6
5
5
Liquidity Risk 5
3
7
Global Americas EMEA Pan Asia
Do you think your industry peer group is currently taking on too much, an appropriate
level of or insufficient investment risk?
Region (%) Type (%)
21 19
Too Much 19 13
40
Investment Risk 29
19
11 22
13 14
8 17
Insufficient
7
Investment Risk 21
13
20 11
66 67
72 70
Appropriate Level of
53
Investment Risk 50
69
68 67
Global Americas Life P&C/Non-Life Multi-Line
EMEA Pan Asia Reinsurance Health
14 | Goldman Sachs Asset ManagementGSAM Insurance Asset Management Insurance Survey
INVESTMENT PORTFOLIO RISK
Despite the overall bearish sentiment on the investment environment, some insurers
are looking to increase portfolio risk
• Globally, 33% of insurers intend to increase • Pan Asian (45%) and Multi-Line insurers (40%)
overall investment risk, while 55% intend to demonstrated the strongest appetite for
maintain risk levels. increasing equity risk.
• 40% of EMEA insurers and 43% of Pan Asian • 30% of insurers intend to increase credit risk,
insurers plan to increase overall investment risk. and 34% of insurers intend to decrease liquidity
EMEA insurers intend to take on more liquidity in their portfolio.
risk, while Pan Asian insurers intend to increase
• 24% intend to increase duration in their
credit and equity risk.
portfolio, while the majority (61%) intends to
• The majority (63%) of Americas-based insurers maintain duration, 35% of Life companies are
intend to maintain overall risk. looking to increase duration, which may be
driven in part by liability matching needs.
Are you planning to increase, decrease or maintain the overall risk in your investment
portfolio in the next 12 months?
Region Decrease (%) Increase (%)
Global 12 33
Americas 11 26
EMEA 13 40
Pan Asia 14 43
Year Over Year
2012 14 26
2013 7 41
2014 8 35
2015 12 33
Are you planning to increase, decrease or maintain the equity risk, credit risk, liquidity and
duration in your investment portfolio in the next 12 months?
Global Decrease (%) Increase (%)
Equity Risk 11 28
Credit Risk 15 30
Liquidity 34 13
Duration 15 24
Credit Risk by Region
Americas 14 17
EMEA 18 40
Pan Asia 11 57
Liquidity by Region
Americas 30 13
EMEA 47 12
Pan Asia 25 16
Goldman Sachs Asset Management | 15GSAM Insurance Asset Management Insurance Survey
ASSET CLASS RETURN EXPECTATIONS
Equity asset classes are expected to outperform credit assets
• Insurers have the highest return expectations for • Insurers globally have the lowest return
private equity (21%), US equities (18%) and expectations for cash/short-term instruments
European equities (15%). European insurers are (36%), government and agency debt (24%) and
more bullish on European equities relative to commodities (10%).
other regions (31%).
• CFOs are more bullish on public equity relative
to CIOs who are more bullish on private equity.
Please rank the 3 asset classes that you expect to deliver the highest and lowest total
returns in the next 12 months. (% Ranked First Choice)
Highest Lowest
Total Return (%) Total Return (%)
Private Equity 21 1
US Equities 18 2
European Equities 15 4
Real Estate Equity 7 1
High Yield Debt 6 6
US Investment Grade Corporates 4 0
Emerging Market Equities 4 6
Hedge Funds 4 2
Emerging Market Sovereign Debt 3 2
Middle Market Corporate Loans 3 0
Commodities 3 10
US Securitized Credit 2 0
Mezzanine Debt 2 1
Infrastructure Equity 2 1
Government and Agency Debt 1 24
European Investment Grade Corporates 1 2
Emerging Market Corporate Debt 1 3
Commercial Mortgage Loans 1 0
Infrastructure Debt 1 0
Cash and Short-Term Instruments 0 36
Large Market Corporate Loans 0 0
CIO vs. CFO Highest Total Return Expectations
CIO CFO
Private Equity 23 US Equities 24
US Equities 16 European Equities 14
European Equities 15 High Yield Debt 12
Real Estate Equity 7 Private Equity 12
16 | Goldman Sachs Asset ManagementHigh Yield Debt 25 32 9 34
European Equities 24 25 5 46
US Equities
GSAM Insurance 23
Asset Management 39
Insurance
9
Survey 29
Emerging Market Corporate Debt 21 27 4 47
Emerging Market Sovereign Debt 19 28 5 49
Large Market Corporate Loans 18 31 3 48
ASSET
Hedge ALLOCATION DECISIONS 18
Funds 17 9 56
European Investment Grade Corporates 16 44 13 27
Insurers intend to allocate to less liquid, private asset classes as opposed to
Mezzanine Debt 16 22 2 60
opportunistic, liquid credit as they indicated in previous years
Emerging Market Equities 16 27 3 54
• The top four asset
Infrastructure Equity classes that insurers intend 15 • Pan Asian
13 1 and EMEA-based insurers also intend 71
to allocate to are all private: commercial to increase allocations to US investment grade
Government and Agency Debt 10 60 27 3
mortgage loans (35%), infrastructure debt corporates and European equities.
Cash and Short-Term Instruments
(30%), middle market corporate loans (29%) and
7 61 27 4
Commodities 2 10 3
• Insurers intend to decrease allocations to cash/ 85
private equity (29%).
short-term instruments (20%) and government
Increase Maintain Decrease and agency debt (17%).
Do Not Invest
Are you planning to increase, decrease or maintain your allocation to the following asset
classes in the next 12 months?
Net (% Increase - % Decrease)
Commercial Mortgage Loans +35
Infrastructure Debt +30
Middle Market Corporate Loans +29
Private Equity +29
Real Estate Equity +25
US Securitized Credit +23
European Equities +19
Emerging Market Corporate Debt +16
High Yield Debt +16
US Investment Grade Corporates +15
Large Market Corporate Loans +15
US Equities +15
Emerging Market Sovereign Debt +14
Mezzanine Debt +14
Infrastructure Equity +14
Emerging Market Equities +13
Hedge Funds +10
European Investment Grade Corporates +4
Commodities 0
Government and Agency Debt -17
Cash and Short-Term Instruments -20
2015 vs. 2012 Highest Net Asset Allocation Changes (% Increase - % Decrease)
2015 2012
Commercial 35 High Yield Debt 33
Mortgage Loans
US Investment
Infrastructure Debt 30
Grade Corporates
30
Middle Market Emerging Market Debt
29 30
Corporate Loans
Private Equity 29 Real Estate 29
Real Estate Equity 25 Bank Loans 24
Goldman Sachs Asset Management | 17GSAM Insurance Asset Management Insurance Survey
Net Asset Allocation Changes
Americas Top 5 Net (% Increase - % Decrease)
Commercial Mortgage Loans 48
Private Equity 34
Middle Market Corporate Loans 30
US Securitized Credit 30
Infrastructure Debt 26
EMEA Top 5
Infrastructure Debt 34
European Equities 31
Middle Market Corporate Loans 28
Real Estate Equity 25
US Investment Grade Corporates 24
Pan Asia Top 5
Infrastructure Debt 36
US Investment Grade Corporates 36
Private Equity 32
European Equities 30
Infrastructure Equity 30
Gross Asset Allocation Changes
Gross (%)
Commercial Mortgage Loans 37 22 2 38
Private Equity 33 19 4 43
Infrastructure Debt 30 17 0 54
Middle Market Corporate Loans 29 22 0 48
US Investment Grade Corporates 28 51 13 8
US Securitized Credit 27 42 4 27
Real Estate Equity 27 22 2 49
High Yield Debt 25 32 9 34
European Equities 24 25 5 46
US Equities 23 39 9 29
Emerging Market Corporate Debt 21 27 4 47
Emerging Market Sovereign Debt 19 28 5 49
Large Market Corporate Loans 18 31 3 48
Hedge Funds 18 17 9 56
European Investment Grade Corporates 16 44 13 27
Mezzanine Debt 16 22 2 60
Emerging Market Equities 16 27 3 54
Infrastructure Equity 15 13 1 71
Government and Agency Debt 10 60 27 3
Cash and Short-Term Instruments 7 61 27 4
Commodities 2 10 3 85
Increase Maintain Decrease Do Not Invest
Net (% Increase - % Decrease)
Commercial Mortgage Loans +35
Infrastructure Debt +30
18 | Goldman Sachs Asset Management
Middle Market Corporate Loans +29
Private Equity +29GSAM Insurance Asset Management Insurance Survey
• Some insurers indicated that while they intended to allocate to infrastructure debt, commercial
mortgage loans and private equity last year, they did not execute on these allocations primarily due to
valuations (26%) and insufficient internal infrastructure or personnel (22%).
Which of the following asset classes did you intend to increase your allocation to in 2014
but did not? (%)
Infrastructure Debt 11
Commercial Mortgage Loans 10
Private Equity 9
Middle Market Corporate Loans 7
Real Estate Equity 6
High Yield Debt 4
Public Equity 3
Mezzanine Debt 3
ALTERNATIVE AND EQUITY ASSETS
• Insurers typically make public equity (47%), • Insurers are more likely to use public equity
private equity (47%) and hedge fund (42%) (28%) for both long-tail lines and surplus assets
allocations with their surplus. relative to private equity or hedge funds.
• More than half of P&C insurers (56%) allocate to
private and public equity with surplus assets.
Where would you place the following asset classes?
Public Equity (%) Private Equity (%) Hedge Funds (%)
7% 10% 5%
18% 21%
40%
42%
28% 47% 21%
47%
13%
Long-Tail Liabilities Surplus Both Neither
Goldman Sachs Asset Management | 19GSAM Insurance Asset Management Insurance Survey
VI. Capitalization and Regulatory Capital
Capitalization remains strong. P&C insurers generally believe their industry is adequately or
over-capitalized following several years of modest catastrophe losses as well as positive
earnings and investment performance. In addition to having well-capitalized balance-sheets, the
significant growth in alternative capital has impacted Reinsurers, who are experiencing pricing
pressure as a result of the influx in new capital. Approximately half of Reinsurers believe the
industry is over-capitalized. EMEA-based insurers expressed slightly higher concerns of under-
capitalization relative to other regions.
While the majority of Americas-based insurers believes regulatory capital will not impact their
investment decisions this year, EMEA and Pan Asian insurers are more likely to take regulatory
capital treatment into consideration when making investment decisions. A significant percentage
of insurers indicated that regulatory capital charges for hedge funds and equity asset classes
impact their investment decisions, as these assets face some of the highest capital charges.
EMEA and Pan Asian insurers are more likely to increase their allocations to long duration bonds
based on regulatory capital treatment, which may be due to duration matching needs. Insurers
face significant capital charges for duration mismatches under Solvency II.
CAPITALIZATION
Most insurers believe they are either adequately or over-capitalized
• Approximately half of Reinsurers (50%) and • Some EMEA-based insurers (21%) indicated
P&C insurers (45%) believe their industry is their industry is under-capitalized.
over-capitalized.
• 66% of Life insurers and 69% of Multi-Line
insurers believe their industry is adequately
capitalized.
Do you believe your industry peer group is currently over-, adequately, or under-
capitalized? (%)
22
45
Over-capitalized 20
50
33
66
49
Adequately Capitalized 69
44
67
12
6
Under-capitalized 11
6
0
Life P&C/Non-Life Multi-Line
Reinsurance Health
20 | Goldman Sachs Asset ManagementGSAM Insurance Asset Management Insurance Survey
IMPACT OF REGULATORY CAPITAL ON ASSET ALLOCATION
• EMEA (37%) and Pan Asian insurers (34%) are • 22% of Life companies stated they are more
more likely to allocate to long duration bonds likely to invest in securitized credit due to
due to regulatory capital treatment. favorable regulatory capital treatment in the US.
• Most Americas-based insurers do not believe • In EMEA, approximately half of insurers said
regulatory capital will impact their investment they are less likely to allocate to hedge funds
decisions particularly in long duration bonds and high yield debt.
(85%), corporate credit (72%) and securitized
credit (79%).
• 38% of insurers globally indicated they are less
likely to allocate to equity asset classes due to
regulatory capital treatment.
Do regulatory capital concerns influence your likelihood of investing in the following
asset classes?
Decrease Increase
Likelihood (%) Likelihood (%)
Hedge Funds 42 10
Equity Assets 38 10
High Yield Debt 33 12
Real Estate Equity 30 14
Securitized Credit 24 14
Corporate Loans 22 14
Long Duration Bonds 12 19
Decrease Increase
Long Duration Bonds by Region Likelihood (%) Likelihood (%)
Americas 7 8
EMEA 24 37
Pan Asia 14 34
Securitized Credit by Region
Americas 13 8
EMEA 46 19
Pan Asia 32 25
High Yield Debt by Region
Americas 25 12
EMEA 49 7
Pan Asia 36 23
Equity Assets by Region
Americas 34 6
EMEA 47 7
Pan Asia 36 27
Goldman Sachs Asset Management | 21GSAM Insurance Asset Management Insurance Survey
VII. Outsourcing
The demand for outsourcing to third party asset managers remains strong. Pan Asian insurers
plan to outsource more of their portfolio this year. Given the need for significant infrastructure
and resources, insurers intend to outsource investments in alternatives such as hedge funds
and private equity and niche strategies such as emerging market equities.
• Insurers globally intend to outsource more of • Insurers are looking to outsource hedge funds
their portfolio (22%) or the same amount (58%). (26%), emerging market equities (23%), US
investment grade corporates (23%), private
• 55% of Pan Asian insurers intend to outsource
equity (22%) and middle market loans (20%).
more of their portfolio.
Do you anticipate outsourcing more, the same amount or less of your investment
portfolio in the next 12 months?
Region (%)
61 60
58
55
45
22
18
15 13 14
9 10 10 9
0 0
More Same Amount Less Do Not Outsource
Global Americas EMEA Pan Asia
Total Assets (%)
72
50 52
26 26
15 14 16
10
6 5 7
More Same Amount Less Do Not Outsource
$5bn or Less $5-$50bn More than $50bn
22 | Goldman Sachs Asset ManagementGSAM Insurance Asset Management Insurance Survey
Which of the following asset classes are you considering outsourcing to a third party asset
manager in the next 12 months? Please select all that apply. (%)
Hedge Funds 26
Emerging Market Equities 23
US Investment Grade Corporates 23
Private Equity 22
High Yield Debt 20
Middle Market Corporate Loans 20
Real Estate Equity 20
Emerging Market Sovereign Debt 17
Government and Agency Debt 17
Infrastructure Debt 16
Commercial Mortgage Loans 15
Emerging Market Corporate Debt 15
European Investment Grade Corporates 15
US Securitized Credit 15
Cash and Short-Term Instruments 13
European Equities 13
Large Market Corporate Loans 13
Mezzanine Debt 13
Commodities 12
US Equities 12
Infrastructure Equity 3
VIII. Conclusion
As easy global monetary policies have pushed yields to ultra-low to negative levels, insurers are
finding it more difficult to find attractive investment opportunities. Despite this pessimistic view,
approximately one-third of insurers globally intend to increase overall portfolio risk, with the
most significant risk appetite stemming from EMEA and Pan Asia. Insurers are anxious about
the growth trajectory of the largest economies, particularly the US, and they are concerned
about higher levels of volatility and deflation. Insurers believe equity asset classes will
outperform credit assets this year and are looking to increase allocations to less liquid, private
asset classes. Overall the industry is well-capitalized and insurers are generally comfortable with
the level of risk their peers are taking.
Goldman Sachs Asset Management | 23General Disclosures Survey information as of February 25, 2015. This material is provided for informational purposes only. It is not an offer or solicitation to buy or sell any securities. Confidentiality No part of this material may, without GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient. This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO. Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant. This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives. Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur. Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice. This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by GSAM and is not a product of Goldman Sachs Global Investment Research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates or changes. United Kingdom and European Economic Area (EEA): In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority. Asia Pacific: Please note that neither Goldman Sachs Asset Management International nor any other entities involved in the Goldman Sachs Asset Management (GSAM) business maintain any licenses, authorizations or registrations in Asia (other than Japan), except that it conducts businesses (subject to applicable local regulations) in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, and India. This material has been issued for use in or from Hong Kong by Goldman Sachs (Asia) L.L.C, in or from Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), in or from Malaysia by Goldman Sachs(Malaysia) Sdn Berhad ( 880767W) and in or from India by Goldman Sachs Asset Management (India) Private Limited (GSAM India). Australia:This material is distributed in Australia and New Zealand by Goldman Sachs Asset Management Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (’GSAMA’) and is intended for viewing only by wholesale clients in Australia for the purposes of section 761G of the Corporations Act 2001 (Cth) and to clients who either fall within any or all of the categories of investors set out in section 3(2) or sub-section 5(2CC) of the Securities Act 1978 (NZ) and fall within the definition of a wholesale client for the purposes of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA) and the Financial Advisers Act 2008 (FAA) of New Zealand. GSAMA is not a registered financial service provider under the FSPA. GSAMA does not have a place of business in New Zealand. In New Zealand, this document, and any access to it, is intended only for a person who has first satisfied GSAMA that the person falls within the definition of a wholesale client for the purposes of both the FSPA and the FAA. This document is intended for viewing only by the intended recipient. This document may not be reproduced or distributed to any person in whole or in part without the prior written consent of GSAMA. This information discusses general market activity, industry or sector trends, or other broad based economic, market or political conditions and should not be construed as research or investment advice. The material provided herein is for informational purposes only. This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Canada: This material has been communicated in Canada by Goldman Sachs Asset Management, L.P. (GSAM LP). GSAM LP is registered as a portfolio manager under securities legislation in certain provinces of Canada, as a non-resident commodity trading manager under the commodity futures legislation of Ontario and as a portfolio manager under the derivatives legislation of Quebec. In other provinces, GSAM LP conducts its activities under exemptions from the adviser registration requirements. In certain provinces, GSAM LP is not registered to provide investment advisory or portfolio management services in respect of exchange-traded futures or options contracts and is not offering to provide such investment advisory or portfolio management services in such provinces by delivery of this material. Japan: This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd. Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources. Asia Pacific: Please note that neither Goldman Sachs Asset Management International nor any other entities involved in the Goldman Sachs Asset Management (GSAM) business maintain any licenses, authorizations or registrations in Asia (other than Japan), except that it conducts businesses (subject to applicable local regulations) in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, and India. This material has been issued for use in or from Hong Kong by Goldman Sachs (Asia) L.L.C, in or from Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), in or from Malaysia by Goldman Sachs(Malaysia) Sdn Berhad ( 880767W) and in or from India by Goldman Sachs Asset Management (India) Private Limited (GSAM India). Australia: This material is distributed in Australia and New Zealand by Goldman Sachs Asset Management Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (’GSAMA’) and is intended for viewing only by wholesale clients in Australia for the purposes of section 761G of the Corporations Act 2001 (Cth) and to clients who either fall within any or all of the categories of investors set out in section 3(2) or sub-section 5(2CC) of the Securities Act 1978 (NZ) and fall within the definition of a wholesale client for the purposes of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA) and the Financial Advisers Act 2008 (FAA) of New Zealand. GSAMA is not a registered financial service provider under the FSPA. GSAMA does not have a place of business in New Zealand. In New Zealand, this document, and any access to it, is intended only for a person who has first satisfied GSAMA that the person falls within the definition of a wholesale client for the purposes of both the FSPA and the FAA. This document is intended for viewing only by the intended recipient. This document may not be reproduced or distributed to any person in whole or in part without the prior written consent of GSAMA. This information discusses general market activity, industry or sector trends, or other broad based economic, market or political conditions and should not be construed as research or investment advice. The material provided herein is for informational purposes only. This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Canada: This material has been communicated in Canada by Goldman Sachs Asset Management, L.P. (GSAM LP). GSAM LP is registered as a portfolio manager under securities legislation in certain provinces of Canada, as a non-resident commodity trading manager under the commodity futures legislation of Ontario and as a portfolio manager under the derivatives legislation of Quebec. In other provinces, GSAM LP conducts its activities under exemptions from the adviser registration requirements. In certain provinces, GSAM LP is not registered to provide investment advisory or portfolio management services in respect of exchange-traded futures or options contracts and is not offering to provide such investment advisory or portfolio management services in such provinces by delivery of this material. Japan: This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd. EMEA: United Kingdom, Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden. United Kingdom and European Economic Area (EEA): In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority. GSAM does not provide legal, tax or accounting advice and therefore expresses no view as to the legal, tax or accounting treatment of the information described herein or any related transaction, nor are we providing any assurance as to the adequacy or appropriateness of this information or our procedures for your purposes. This material is not a substitute for the professional advice or services of your own financial, tax, accounting and legal advisors. Goldman Sachs and its affiliates, including GSAM, shall have no liability, contingent or otherwise, to the recipient or to any third parties (including your advisors, auditors or other agents) for the quality, accuracy, timeliness, continued availability or completeness of the material nor for any special, indirect, incidental or consequential damages which may be incurred or experienced because of the use of the material or calculations that may be made or data that may be generated through use of the material even if Goldman Sachs has been advised of the possibility of such damages. © 2015 Goldman Sachs. All rights reserved. 158194.OTHER.MED.OTU USI-INSSV15/04-15
You can also read
