Schweser said life insurance time horizon getting shorter because of disintermediation risk, ALM approach…etc. But historical these issues also exist as well?
I don’t think historical matters. What you need to know is that the current environment is more competitive.
Nevertheless, the answer to your question - probably. It’s a competitve industry, so I’m sure similar things existed, maybe just not as intense.
I would follow what the CFAI book says:
Historically, insurance companies have been long term investors. However, due to increasing application of ALM strategies, time horizons among the various insurance products have become unique/segmented. Overall though, ALM has shortened the duration of life insurance time horizons. (page 220 of the online book)
Thanks! So because of lifer starts/enhances to use ALM approach.
Yeah. If we get this on Saturday, im still going to first mention how insurance companies are traditionally long-term…as long as I also mention increasing use of ALM shortening duration/time horizons. Wouldn’t hurt 