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25th September 2015
Boxing clever
On 3 August, the London Market Student Group (LMSG) was host to Scott Eason, partner and head of insurance consulting at Barnett Waddingham LLP. The title of Scott's presentation was 'Thinking outside the box'; in the context of investment strategies for general insurance companies.
Scott began by highlighting the importance of investment returns and how they have been at an all-time low for several years, and far lower than expected. He described how companies have various considerations that may inform their investment strategy, such as: business objectives, risk appetite, capital requirements and asset-liability management.
Investment portfolios of general insurers have traditionally been quite boring, and Scott suggested some "more sexy" investments that general insurers might consider. These included: illiquid loans; absolute return funds; and volatility controlled equity.
Scott also questioned why general insurance companies are not investing in these products. It was suggested that lack of internal knowledge was a prime driver behind investing highly in cash and gilts only. Capital requirements under Solvency II are also still unclear.
To finish, Scott stated that there are a number of non-traditional assets available, but companies need to identify which aspect of investment performance they want to optimise. Considering the portfolio as a whole is key, rather than looking at individual assets in isolation.
If you would be interested in learning more about the LMSG or attending our events, please email Cian at [email protected]
Scott began by highlighting the importance of investment returns and how they have been at an all-time low for several years, and far lower than expected. He described how companies have various considerations that may inform their investment strategy, such as: business objectives, risk appetite, capital requirements and asset-liability management.
Investment portfolios of general insurers have traditionally been quite boring, and Scott suggested some "more sexy" investments that general insurers might consider. These included: illiquid loans; absolute return funds; and volatility controlled equity.
Scott also questioned why general insurance companies are not investing in these products. It was suggested that lack of internal knowledge was a prime driver behind investing highly in cash and gilts only. Capital requirements under Solvency II are also still unclear.
To finish, Scott stated that there are a number of non-traditional assets available, but companies need to identify which aspect of investment performance they want to optimise. Considering the portfolio as a whole is key, rather than looking at individual assets in isolation.
If you would be interested in learning more about the LMSG or attending our events, please email Cian at [email protected]
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