In its latest survey of the insurance sector, Goldman Sachs has, for the first time, included questions related to cryptocurrencies. The replies of top global asset managers show that they’re slowly recognizing crypto assets as investments.
The adoption of digital assets by insurance sector investors has been a keenly watched space. In December 2020, MassMutual Insurance Company invested $100 million in BTC.
Interest of Asset Managers in Crypto
The report observes that although very small, the level of interest among insurers in cryptocurrencies is growing.
“The vast majority of insurers are not considering investing in cryptocurrencies. American insurers are slightly more interested, with 11% currently invested or considering investing in cryptocurrencies, compared to Asian insurers at 6%, and European insurers at 1%. However, this level of interest is still notable,” the survey report said.
The Goldman Sachs Asset Management Insurance Survey 2022 has inflation, investment uncertainty, yield enhancement, and Environment Social and Governance (ESG) as the themes. The survey involved 328 CIOs and CFOs, who represent over $13 trillion in global balance sheet assets, which is about half of the global insurance industry.
How Crypto Fared in the Survey
The survey asked the respondents to mention three asset classes that they think would deliver the highest returns in the next 12 months. Six percent of the respondents which work out to be 20 of the surveyed individuals, chose cryptocurrencies as the first option, while 9% picked the asset class among the top three.
When asked to rank the three asset classes that would give the lowest total return in 12 months, the number of respondents who marked cryptocurrencies as the first choice was only 16%, and 22% ranked it among the top three. Digital assets fared better than government and agency bonds and cash and short-term instruments, which occupied the first and second positions.
To a question, if the respondents are planning to increase, maintain, or decrease their allocations to the available asset classes, 1% of respondents said they would increase, and 7% said they would maintain their allocations.
Goldman Executive Positively Surprised
Mathew McDermott, Goldman’s Global Head of Digital Assets, said he was positively surprised by the growing adoption of digital assets by global asset managers.
“As the crypto market continues to mature, coupled with growing regulatory certainty, a cross-section of institutions are becoming more confident to explore investment opportunities as well as recognizing the disruptive impact of the underlying blockchain technology. I have been positively surprised by the rising adoption by global Asset Managers, who clearly recognize the potential of this market,” McDermott said.
One of the key findings of the Goldman insurance survey 2022 is that global assets managers are increasingly finding rising inflation a key concern threatening their portfolios.
Meanwhile, reports suggest that Goldman Sachs has been in talks with crypto exchange FTX to integrate later’s derivatives trading.
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