@Sage Advisory Services.
Most insurers would agree that we have entered a new period of elevated geopolitical uncertainty and macroeconomic volatility (Geoeconomics is oh so fun). In response, insurers are exploring a variety of avenues to build more resilient, flexible, and sustainable portfolios while capitalising on new and evolving opportunities. This requires a considerably more active approach to asset allocation, a more rigorous approach to diversification, and the application of more dynamic risk management strategies. (Yes, life is getting more complicated.)
For insurance companies, this suggests a successful investment program will require a much more thoughtful, disciplined, and collaborative approach across all interested parties (i.e., financial, accounting, actuarial, rating, regulatory). With investment teams deeply embedded within this cast of characters, proper manager selection cannot be understated. It becomes paramount (and possibly quite entertaining).
When selecting an investment manager, there are a number of key considerations.
Here are The Dirty Dozen:
- Is there a demonstrated knowledge of the insurance industry?
- Are they knowledgeable and experienced in supporting enterprise-wide solutions?
- How adept are they in managing the day-to-day ecosystem of an insurance company?
- Will they be able to effectively integrate with senior management and staff?
- Are they fully engaged with the industry so as to provide unique insights and perspectives?
- Do they deliver solutions across the primary pools of risk (liquidity, reserve, surplus)?
- Is delivery focused on unique and highly customised investment solutions?
- Have they delivered consistent outperformance across extended market cycles?
- What are the resources for ALM, asset allocation, risk-management, and sustainable strategies?
- Are relationship management resources dedicated to the insurance industry?
- Can they deliver all of the above in a highly cost-effective manner?
- Do they know how to make insurance more fun than it deserves to be? (Culture matters)
The selection of an investment manager should be a considered and disciplined process. Start early. Take your time. Make the right decision. And by all means, have some fun.
Disclaimer:
This is for informational purposes only and is not intended as investment advice or an offer or solicitation with respect to the purchase or sale of any security, strategy or investment product. Although the statements of fact, information, charts, analysis and data in this report have been obtained from, and are based upon, sources Sage believes to be reliable, we do not guarantee their accuracy, and the underlying information, data, figures and publicly available information has not been verified or audited for accuracy or completeness by Sage. Additionally, we do not represent that the information, data, analysis and charts are accurate or complete, and as such should not be relied upon as such. All results included in this report constitute Sage’s opinions as of the date of this report and are subject to change without notice due to various factors, such as market conditions. Investors should make their own dec sageadvisory.com, or refer to our Form ADV, which is available upon request by calling 512.327.5530.
