Our Responsible Investing strategy
Asset-liability management (ALM) continues to be the foundation of our investment philosophy. To meet future claims and benefits, we invest the premiums generated by our underwriting activities in assets whose cash flows match the durations and currencies of our re/insurance liabilities. Therefore, we generally invest the majority of our portfolio in higher-quality fixed income securities with stable long-term returns. At the end of 2019, such investments accounted for 79% of our total assets under management1 (see graph).
Including ESG criteria along the investment process makes economic sense, especially for long-term investors, as it improves risk-adjusted return profiles and reduces downside risks. Our Responsible Investing strategy relies on the three cornerstones Enhancement, Inclusion and Exclusion, of which Enhancement is the most meaningful for Swiss Re.
1 Asset classes considered are government bonds, credit bonds, and mortgages and other loans.