The large insurance funds recorded annual losses of €127 million in May, according to new figures released by the Insurance Companies Association. This decline is mostly linked to the increased cashout of life insurance contracts and the transfer of money to lower risk funds.
According to latest Insurance Companies Association data, the assets of large insurance funds fell by 15.1% or €126,9 million to €714,9 million compared to €841,8 million last year.
In April, the annual loss of funds amounted to €105,3 million.
The decline in the value of assets is attributed to the cashout of insurance contracts as the yields of the funds record increases or milder losses.
The largest domestic insurance fund, Eurolife Gross, which is of medium risk, decreased 10.5% with its value declining in May to €297,8 million from €332,6 million last year.
The fund's performance over the last twelve months soared 4.9%.
The guaranteed fund of Eurolife fell by 5.9% to €28,7 million from €30,5 million, however, its performance in the past twelve months soared 2.47%.
According to Eurolife Fund Manager, Constantinos Sophocleous, some funds have been adversely affected by the Eurogroup decisions due to their cash rate in Bank of Cyprus and Cyprus Popular Bank.
"The Eurolife funds were not particularly affected by the bail-in of deposits", he noted.
According to Mr. Sophocleous, all Eurolife funds had positive returns for the twelve months due to the wide dispersion of investments and the positive returns of stocks and bonds abroad.
“Compared with April, cashouts have dropped but in May the funds were affected by the decline in foreign markets.
"The cashout of contracts have decreased compared to the previous months. The decline in May was mainly attributed to stock losses abroad as a result of the downturn in the stock market”.
Losses of 18.6% in May 2013 compared to May 2012 were observed in the assets of Property of Universal Life. The decline in the yearly yield for the fund is 2.54%.
The value of assets of Growth was lower by 6.7% in May. In the twelve months, the yield of the fund stood at 6.72%.
Cyprialife, the fourth largest insurance fund, fell in value by 17.3% in May this year to €76,1 million from €92 million. For the twelve months, the fund's yield stood at 3%.
The other fund of Cyprialife, the Dynamic, also of high risk, suffered a drop in the value of its assets by 21.3% in the fifth month of 2013 to €29,8 million from €37,9 million. The losses for the fund in the twelve are restricted to 0.99%.
Losses of 15.4% are registered in the value of asset of Secure. The fund has a negative return and amounts to 8.58%.
According to Investment Manager of CNP Laiki Insurance, Chrysanthos Pantazis the last 2 years there has been a shift by customers to funds with lower risk, especially guaranteed funds.
"This together with the fact that some funds are closed to new customers led to a significant drop in the assets of some funds, such as Cyprialife, Dynamic and Secure», he said.
As mentioned, the decrease in the assets of the funds does not reflect the yields of these funds but mainly is the result of outflows from these funds.
"In terms of the returns on our funds, the international environment was very positive and as a result funds with significant dispersion abroad had significant returns until the end of May. For example, International fund on 31/05/2013 had a return of 4.89% for the first five months, 10.51% for the last 12 months and 4.09% annually for the last three years”, Mr. Pantazis said.
According to latest Insurance Companies Association data, the assets of large insurance funds fell by 15.1% or €126,9 million to €714,9 million compared to €841,8 million last year.
In April, the annual loss of funds amounted to €105,3 million.
The decline in the value of assets is attributed to the cashout of insurance contracts as the yields of the funds record increases or milder losses.
The largest domestic insurance fund, Eurolife Gross, which is of medium risk, decreased 10.5% with its value declining in May to €297,8 million from €332,6 million last year.
The fund's performance over the last twelve months soared 4.9%.
The guaranteed fund of Eurolife fell by 5.9% to €28,7 million from €30,5 million, however, its performance in the past twelve months soared 2.47%.
According to Eurolife Fund Manager, Constantinos Sophocleous, some funds have been adversely affected by the Eurogroup decisions due to their cash rate in Bank of Cyprus and Cyprus Popular Bank.
"The Eurolife funds were not particularly affected by the bail-in of deposits", he noted.
According to Mr. Sophocleous, all Eurolife funds had positive returns for the twelve months due to the wide dispersion of investments and the positive returns of stocks and bonds abroad.
“Compared with April, cashouts have dropped but in May the funds were affected by the decline in foreign markets.
"The cashout of contracts have decreased compared to the previous months. The decline in May was mainly attributed to stock losses abroad as a result of the downturn in the stock market”.
Losses of 18.6% in May 2013 compared to May 2012 were observed in the assets of Property of Universal Life. The decline in the yearly yield for the fund is 2.54%.
The value of assets of Growth was lower by 6.7% in May. In the twelve months, the yield of the fund stood at 6.72%.
Cyprialife, the fourth largest insurance fund, fell in value by 17.3% in May this year to €76,1 million from €92 million. For the twelve months, the fund's yield stood at 3%.
The other fund of Cyprialife, the Dynamic, also of high risk, suffered a drop in the value of its assets by 21.3% in the fifth month of 2013 to €29,8 million from €37,9 million. The losses for the fund in the twelve are restricted to 0.99%.
Losses of 15.4% are registered in the value of asset of Secure. The fund has a negative return and amounts to 8.58%.
According to Investment Manager of CNP Laiki Insurance, Chrysanthos Pantazis the last 2 years there has been a shift by customers to funds with lower risk, especially guaranteed funds.
"This together with the fact that some funds are closed to new customers led to a significant drop in the assets of some funds, such as Cyprialife, Dynamic and Secure», he said.
As mentioned, the decrease in the assets of the funds does not reflect the yields of these funds but mainly is the result of outflows from these funds.
"In terms of the returns on our funds, the international environment was very positive and as a result funds with significant dispersion abroad had significant returns until the end of May. For example, International fund on 31/05/2013 had a return of 4.89% for the first five months, 10.51% for the last 12 months and 4.09% annually for the last three years”, Mr. Pantazis said.
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