Property and Casualty (P&C) Insurance companies in the United States invest heavily in fixed income products. In the current low-rate environment, many insurers have been trying to boost their portfolio yield by lowering the credit quality of their corporate portfolio and by exploring opportunities in new asset classes, such as hedge funds and private equity. At the same time, insurance companies must manage the total capital requirements on their portfolios. Within the industry, there is a view that the regulatory cost of alternative assets is prohibitively expensive. In this study, we seek to demonstrate that investments in equities and alternatives are notably less capital intensive than their stand-alone regulatory charges might suggest. We examine the desirability of a marginal increase in equities and alternatives given the current average asset allocation (in unaffiliated investments) for P&C companies and PIMCO’s forward looking views on returns. Taking into account both regulatory capital and overall investment risk, we find that alternative assets are an attractive option for the P&C insurance industry.