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Japan’s Sumitomo Life gives 3 trillion yen foreign bond mandate to investment arm Symetra

By Hui Ching-hoo   
July 11, 2022

Japan’s Sumitomo Life Insurance has handed a 3 trillion yen (US$22 billion) foreign corporate bond mandate to its US-based investment arm, Symetra Investment Management, and will keep raising exposure to such debt for the income.

Last October, the company outsourced a 2 trillion yen foreign corporate bond mandate, also to Symetra.

"Sumitomo Life continues to increase its overseas corporate bond exposure in order to secure stable income,” the insurer says in a statement on July 8.

“Sumitomo Life has been increasing its investment in overseas corporate bonds as assets that can be expected to improve profitability by taking a certain level of credit risk amid the continuing low interest rate environment.”

According to the company, Symetra has “a strong track record in investment management, particularly reducing downside risk during market downturns”.

Asset transfer and administrative tasks for the new mandate will be done by Sumitomo Life’s investment advisory unit, Sumisei Asset Management, which will also monitor Symetra’s operations, including currency hedging, risk management, and investment status.

The insurer says it has deployed some staff to Symetra “and we plan to create an integrated team to improve the investment performance and the efficiency of the entire group”.

Symetra, based in Washington state, had $29 billion of assets under management as of December 2021.

Osaka-based Sumitomo Life, Japan’s fifth largest life insurer, had approximately 34.5 trillion yen of investable assets at the end of 2021.

The company’s 2021 annual report shows that 27.6%, or 9.52 trillion yen, of its total assets was allocated to foreign bonds denominated in foreign currency as of December 2021, up from 26.5% or 8.53 trillion yen a year ago.