Evaluating IPS for an Insurance Company Amid Economic Changes

As an investment manager at a large insurance company, you are tasked with evaluating the company's current investment policy statement (IPS) in light of changing economic conditions. The IPS outlines the strategic asset allocation, risk tolerance, and investment objectives of the portfolio. Recent market trends indicate increased volatility in bond markets and a potential shift in interest rates. Additionally, the company has received new regulatory guidance regarding capital requirements.

Discuss the key factors you would consider when reassessing the IPS for the insurance company. In your response, explain how these factors may impact the company's asset allocation, risk management strategies, and overall investment objectives. Be specific in your analysis and provide recommendations that align with the company's goals to maintain solvency while pursuing growth opportunities.