TOP 10 INSURANCE COMPANY ASSET
MANAGERS The financial crisis has lifted
outsourcing of insurer asset management, says Alex McCallum of Insurance Asset Manager, whose survey of insurer behaviour has produced surprising results.
EXHIBIT 1: RANKING OF FIRMS MANAGING INSURANCE COMPANY ASSETS NON-AFFILIATED GENERAL ACCOUNT INSURANCE ASSETS
2009 BlackRock
Deutsche Insurance Asset Management GR-NEAM Conning
Wellington Management State Street Global Advisors
Goldman Sachs Asset Management
Pacific Investment Management Company PineBridge Investments Western Asset Management
($ billions) 191.27 172.80 79.48 77.00 72.75
69.95 54.10 45.26 32.08 27.58
2008
($ billions) 120.35 150.20 62.65 74.84 47.51
50.39 37.17 30.17 0.00
29.73
General account insurance assets include assets that back the cash value accumulations of policyholders and surplus, but exclude assets dedicated to ‘separate account’ insurance products.
investment world, and the financial crisis, ironically but understandably in hindsight, has stimulated even greater interest in insurance investment outsourcing.
T The latest survey carried out by Insurance Asset Manager (IAM) lists a
record 50 US investment firms that are active in managing outsourced insurance assets, and calculates their aggregate amount of insurer assets under management (AUM) at nearly $1.5 trillion, as of December 31, 2009. With non-US insurance asset managers included, the global AUM total would climb higher than $2 trillion and be comparable to the hedge fund industry in size.
The US AUM total of $1.5 trillion represents a sharp rebound from a
22 percent drop in externally managed insurer assets in 2008 from 2007, at the height of the crisis. A 32 percent recovery in 2009 put the industry’s growth pattern back on pace with pre-crisis years faster than expected, helped not only by an increase in asset values, but also by the sudden urgency of the situation for many insurance companies that previously relied only on in-house investment management.
Although outsourcing of insurer investments is a well-established
practice, a good many insurer hold-outs began seeking external investment help for the first time, while other companies that already outsourced started to expand their mandates with a wider range of asset classes. As Gary J. Madich, chief investment officer of JPMorgan Asset Management’s global fixed income group, explains: “You can see what happened as more and more insurers started looking for the specialised expertise needed to deal with their investments, externally as well as
46 | INTELLIGENT INSURER | November 2010
he management of insurance company assets by external investment managers has grown into one of the largest and most competitive market segments in the institutional
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