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Insurance Asset Management: Latest Papers

Asset Management for Insurance Companies - latest research and papers

To paraphrase Warren Buffett, insurance companies are seldom great investments, yet they are great investment vehicles.  As long as the business is profitable and well run, these companies generate a sizeable float of insurance premiums that can be used as a second source of revenue.  But how do asset managers within insurance companies manage their investments, and what other pressures are specific to this particular subset of the investment industry?

Here are some of the top white papers about insurance asset management that have recently been uploaded to Savvy Investor, covering asset allocation issues for insurers, currency hedging, regulatory updates, megatrends, and other relevant topics. 

insurance asset management


Long-Term Equity Investments for European Insurers (DWS AM, Jun 2019)

For compliance reasons, this paper is only accessible in certain geographies

New European Commission regulations have amended Solvency II in some areas. Most notably, a new category of equity investments has been introduced: Long-Term Equity investments.

ETFs in Insurance General Accounts (S&P Dow Jones Indices, 2019)

This is the fourth annual report covering ETF usage within insurance general accounts. It explores the dynamics of the industry, and the many ways that over 1900 insurance companies utilised ETFs in 2018.

To Hedge or Not to Hedge: Assessing Currency Management Solutions (QMA, 2019)

Managing currency risk can become quite complex. Should currency exposures be hedged away, or can investors use currency risk premia as a type of portable alpha to boost risk-adjusted portfolio returns?

Bonds and equities: a new correlation for a new world order (BNP Paribas AM blog, Jun 2019)

Long-term investors, especially those with relatively static asset allocation policies, would be wise to consider recent changes in correlations, as well as whether new risk factors or new technologies merit bringing other asset classes into their overall allocations.

GSAM Insurance Asset Management Survey 2019

This year's survey reveals increased concerns about the credit cycle, shifts in the perception of risk, and capped expectations for certain asset classes.

Solvency II update (HSBC Global Asset Management, Mar 2019)

For compliance reasons, this paper is only accessible in certain geographies

The EC updated their Solvency II directive in March of this year, removing some financing constraints and providing other benefits for insurers. This article discusses the specific amendments to Solvency II that are relevant for the insurance industry.

Federal Home Loan Banks: An opportunity for U.S. insurers (Wellington, May 2019)

For compliance reasons, this paper is only accessible in the United States

Federal Home Loan Banks offer competitive rates to insurers, which provides opportunities to enhance yield or add alpha. Additionally, FHLB debt is viewed more favorably by ratings agencies. Wellington Management looks at customized investment solutions capitalizing on these programs.

Emerging markets: the silver lining amid a challenging outlook for insurers (Swiss Re Institute, Jan 2019)

The economic power shift from western countries to eastern countries is likely to continue, and as a result, emerging markets should be the prime drivers of growth for the global economy throughout the next decade. Our models indicate that within 10 years, EM countries will comprise 60% of global growth.

The Insurance AI Imperative (Cognizant, 2019)

WIthin the insurance industry, AI technologies are impacting everything from the development of products to underwriting and claims processes. Some insurance companies risk being left behind by their competitors if they are not up to speed on AI.

Aggregation and Diversification of the IFRS 17 Risk Adjustment (Moody's, Mar 2019)

Moody's describes the choices that insurance companies can make with regard to IFRS 17 risk adjustments. These adjustments for non-financial risk can be influential in both the pricing and reporting of insurance contracts.

Five future trends shaping the insurance sector (Knight Frank, 2019)

Blockchain, autonomous vehicles, big data, changes in customer preferences, and other megatrends are all disruptive forces that the insurance industry must adapt to. How will these trends and others shape the future of the insurance industry?

Balancing Act: Managing Risk across Multiple Time Horizons (FCLT, 2018)

This FCLT paper covers the topic of managing multiple-horizon portfolios - it considers the barriers and hurdles to doing so, then proposes a range of tools that funds could use, depending upon their particular situation.

Institutional Investor Study 2018: An Insurance Focus (Schroders)

This 19-page report summarizes a Schroders survey of 157 insurance investors, representing around USD 10 trillion AUM.

Making the Case for CLOs for U.S. Insurers (PineBridge, 2018)

This paper explores how collateralized loan obligations (CLOs) work and the potential benefits they offer insurance investors.

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