Keith Viverito: Clearwater Analytics is a provider of SaaS-based investment accounting and management analytics solutions. We currently work with over a thousand clients within the asset owner and asset management industry. Our single instance, multi-tenant platform answers business questions and spots trends in the more than $7 trillion of investment data that is reconciled on a daily basis — delivering relevant insights to investment professionals across our community.
I am the executive responsible for Clearwater Analytics’ international business, which includes the EMEA and APAC regions. My primary focus centres on the growth and expansion of our business in these regions.
Keith: This is about insurance companies and the continued increase of allocations to alternatives. I would break this question down into two components. The first is that you must understand the different risk, return and liquidity profiles of these new assets, whether it is private credit, real estate, etc.
"Our data suggests that alternative asset types are seven times more
complex to manage and process than more traditional assets."
The characteristics of these assets have an impact on your short-term and long-term cash, and you need to understand the downstream impact on your liabilities and your long-term investment goals. Most insurers, if not all, understand this and have a good grip on it. What is less well understood is that for most insurers, managing alts is much harder than managing a traditional short-term duration and/or fixed income instrument.
Our data suggests that alternative asset types are seven times more complex to manage and process than more traditional assets. Therefore, the knock-on effect of this is that you need to have technology underpinning your investment strategy and operations to support these assets at scale and ensure the reliability of your cash and portfolio analytics. It is impossible to scale alts without technology, and especially without a third-party partner underpinning your investment operations lifecycle.
Finally, as insurance companies continue to increase allocations to these new assets, they do not want to look at them in silos. Ten years ago, when alts were still relatively new and gaining momentum, you had situations where managers would look at them in individual, distinct portfolios. That’s no longer the case.
Most customers are now viewing these assets as part of a diversified whole portfolio strategy -- holistically in a single portfolio alongside traditional investments. Advanced technology is a critical enabler for insurers to manage complex and integrated asset mixes effectively.
Keith: Short-term views of AI in the marketplace have centred around its capacity to improve support functions, accelerate data throughput, and achieve higher levels of accuracy and automation in data management and reconciliation. We see massive opportunities in these areas and are actively capitalising on these possibilities.
However, the true promise of AI extends beyond these operational improvements. The effectiveness of generative AI hinges on the availability and breadth of data it can access. Our aim is to pioneer applications that identify major opportunities for efficiency gains, customer support and data management – they signify a paradigm shift in efficiency for the front-office, which is where the real unlock will take place for business operations.
While it is early days, we believe insurance companies and investment management firms will increasingly leverage AI in the front-office and realise tremendous value from these technologies over time. It will be much less about operational efficiency and much more about levelling the investment management field and empowering investment teams with gen AI tools to surface trends, data, insights, and benchmarks to help them make the best investment decisions globally and across asset types.
Keith: We should be candid on this topic. These reforms are happening, and it is paramount for firms to be proactive. One example is that if you are a firm that is grappling with the implications of Solvency II, there’s a clear advantage in being ahead of the changes. The sooner you start, the better access you have to top-tier resources – talent, technology, information – which, quite frankly, will be in high demand as these reforms take hold.
"Early action provides you with the opportunity to plan, anticipate
change, prepare for and use it as a strategy advantage."
My point is simply for practical purposes. Do not be the last one in the queue, because we are seeing significant demand for this. Position yourself as a first mover, where you’re at the front, with expertise and capabilities within reach.
The second thing is, the sooner you start, the more time you will have to plan. It’s about assurance and confidence for your clients. Your clients want to know your organisation is ahead of the curve and you’re ready.
Early action provides you with the opportunity to plan, anticipate change, prepare for and use it as a strategy advantage. You’ll be able to make changes that may be required in either your investment and/or reporting processes as a result of these regulatory changes.
Keith: We have built our business around investment accounting and reporting for the last 20 years, and we continue to invest heavily in these areas to stay ahead. The bottom line is, in terms of regulation, we are only seeing more complexity, and that is not going to change any time soon.
Having a strong technology infrastructure and data strategy underpinning your investment operations is paramount, as your business’s survival and success depends on it. When you prioritise this tech foundation, you’re proactive. It’s much easier to seamlessly incorporate new mandates and comply with evolving regulatory and reporting requirements.
Keith: I am still surprised at how many insurance companies do not have sound, modern technology and data strategies. These are the very tools that provide accuracy, actionability, and timeliness across an entire portfolio.
Far too many firms are still in the grip of outdated tools like Excel, where some of these assets are managed in silos and teams are only as scalable and as agile as the underlying data and forward-looking analytics allow them to be. Let’s be clear, dependency on Excel is a bottleneck. It doesn’t foster the agility and nimbleness an organisation needs.
We see significant demand from our existing customers and prospective customers, who are seeking a holistic view of their investments, operational processes, accounting, and reporting, etc. They want to empower their teams to excel at what they do best and equip them with a clearer picture of the path ahead.
"Some nuances are important for firms to consider. Their
underlying technology is often their Achilles’ heel."
When you’re looking for partners, you need to pay close attention to the underlying technology underpinning their businesses. It’s a critical factor that is too often overlooked.
Clearwater is a cloud-native SaaS service provider, while many in the industry offer legacy tools that have been moved to the cloud, piecing together disparate systems in the background that imitate what we offer.
Some nuances are important for firms to consider. Their underlying technology is often their Achilles’ heel, limiting what they can deliver. So, firms should scrutinise the tech foundations of their potential partners. It’s this due diligence that will determine whether you’re bound to the limitations of the past or equipped for the future.
Keith: It is all about technology and data. In today’s environment, you simply cannot manage the whole portfolio without technology and data.
One of the biggest mistakes I still see firms make is to devise a data strategy without first selecting the appropriate technology platform they’re going to run their data strategy on. The approach is backwards. Choosing the right technology platform must come first, as its capabilities will inform and support your data strategy.
"Such foresight is fundamental for scaling operations effectively
and staying competitive in the current market."
Think of it like choosing your smartphone. You wouldn’t download apps or transfer contacts without knowing whether you’re using an Android or an iPhone. You choose your phone first, assessing its features, benefits and limitations, and then you pick your apps and data, load your contacts and personal data, etc., not the other way around.
This is the mindset that should guide the insurance and asset management industry’s approach towards technology and data strategies. Such foresight is fundamental for scaling operations effectively and staying competitive in the current market.
