As one of the largest investors in the world, insurers can have an outsized impact on markets and investment flows.

So how are they approaching today's volatile markets?

I'm Alison Nathan, and this is Goldman Sachs Exchanges.

For today's episode, I'm sitting down with Goldman Sachs' Mike Siegel, global head of the insurance asset management and liquidity solutions business and

Matt Armis global head of insurance asset management to discuss how insurers are managing

their portfolios and why it matters for markets and economies Mike Matt welcome back to

the program thank you thank you for having us this has been an annual event the last few

years so looking forward to the conversation.

So, Mike, this is clearly a very tricky market environment for all kinds of investors,

but does this environment pose any particular challenges for insurers?

Alison, this is a tricky environment. We've seen tricky environments before.

It does pose challenges for the insurers, but it also poses quite significant opportunities.

When you look at the typical insurance company balance sheet, they are underweight relative to others' equities.

So the equity market volatility is concerning, but not damaging to their capitalization.

That's number one. Number two, the life companies in particular do offer out equity sensitive

products. So that creates more of a hedging need for them. They're very adept at that.

But I'm sure with the markets whip-sawing

around, that's creating a lot of work on the hedging front. With regard to the rest of the balance sheet,

which is typically fixed income instruments, there's two aspects to that. One, what are government

rates doing? And to the extent that they are rising, that can be a benefit, but also we see a divergence in government rates doing and to the extent that they are rising that can be a benefit, but also

we see a divergence in government rates around the world, which is also creating some opportunities

to maybe sell into this market and buy in that market. But the other thing is the credit spread

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