Investment Strategy for Insurance Companies Amid Changing Conditions

Imagine you are the Chief Investment Officer of a large insurance company managing a diversified portfolio of assets. The company is facing changing regulatory conditions, evolving interest rates, and increased competition in the insurance market.

In light of these factors, outline a comprehensive investment strategy tailored for the company's portfolio management that addresses both fixed-income and equity investments. Discuss how you would balance the portfolio to meet the company's liability needs while also providing a reasonable return on equity, and explain the implications of interest rate risk and credit risk in your strategy. Additionally, consider how regulatory capital requirements may affect your asset allocation decisions.

Provide a rationale for your asset allocation decisions and identify specific asset classes or securities you would consider including in the portfolio, justifying your choices based on their characteristics and current market conditions.