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Squeezing the Lemon

Squeezing the Lemon: Driving insurance profits in the new investment landscape

November 2011 | Graham Harman – Director, Capital Markets Research
 

Investment markets are posing significant headwinds for the insurance sector, with yields low and with equity markets held back by global concerns. In response to these challenging conditions, Russell Investments has published a research paper which looks at ways to "squeeze the profit from the lemon", and to work your asset portfolio harder.

In Squeezing the Lemon: Driving insurance profits in the new investment landscape, we clarify the mechanisms by which developments in security markets can impact an insurance company; identify which variables are within management control, versus which are not; and map out ways to focus and improve investment decisions. A tailored investment strategy can feed directly into enhanced insurance company profitability.

Within this paper we've proposed Easy Squeezes: Top Ten Ideas to Boost Insurance Company Profitability. Three of these ideas are:

• Break the asset-liability geographical nexus – i.e. invest shareholders funds offshore unhedged.
• Invest in Managed Futures funds.
• Calibrate your risk models on a forward-looking, not a backward-looking basis, with a view to freeing up capital.

To find out what the 7 other insurance company profitability ideas are, request a copy of the paper.

Request a copy

To request a copy of the Squeezing the Lemon research paper, call Christine Cameron on (02) 9229 5111 or complete your details below and a Russell Associate will contact you.