Image: Reuters/Dado Ruvic

A new study by Goldman Sachs shows that 11% of U.S. insurance companies have declared either an interest in investing or current investment in cryptocurrencies. Insurers expect to maximize their return on this investment over the next 12 months.

According to a global survey by Goldman Sachs of 328 chief financial and chief investment officers, U.S. insurers are the most interested in investing in cryptocurrencies relative to their firms' asset allocation and portfolios, according to Cointelegraph. In its annual global review of insurance investments, answers about cryptocurrencies were included for the first time. The data showed that 11% of U.S. insurance firms indicated either an interest in investing or a current investment in crypto.

Goldman Sachs global head of insurance asset management Mike Siegel, speaking on the company’s Exchanges at Goldman Sachs podcast, said he was surprised to get any result:

“We surveyed for the first time on crypto, which I thought would get no respondents, but I was surprised. A good 6% of the industry respondents indicated that they’re either invested in crypto or considering investing in crypto.”

The survey also showed that 6% of Asian insurers are interested in or have already invested in cryptocurrencies, while European insurers took only 1%.

The report found cryptocurrencies were in fifth place for the asset class insurers expect to deliver the highest returns over the next 12 months, with 6% ranking it as their first choice, beating United States and European equities.

In the podcast, Siegel also said that the survey tried to understand the motivations for buying such an asset class:

“We did some follow-up questions on that, and generally, the companies that are either invested or considering crypto are doing so to understand the market and to understand the infrastructure. But if this becomes a transactable currency, they want to have the ability down the road to denominate policies in crypto and also accept premium in crypto, just like they do in, say, dollars or yen or sterling or euro.”

Only 1% of the total surveyed firms said they would increase their crypto position over the next 12 months; 7% said they would maintain their current position; and 92% said they would not invest in crypto over the next year. 16% of respondents said they expect cryptocurrencies to generate the lowest returns among other asset classes over the next 12 months.

Mathew McDermott, the bank's global head of digital assets, wrote in the report:

“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.”

© 2022, Eva Fox | Tesmanian. All rights reserved.

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