Investment solutions for insurers
Turning challenges into opportunities
Today's market, business, regulatory and accounting challenges are forcing insurers to focus and strengthen their capabilities in asset liability management. These challenges have not changed insurers' primary economic objectives – to remain profitable and competitive. How insurers' go about achieving those objectives requires a well designed and executed investment strategy.
How our expertise fits with your current challenges?
We employ a client-lead partnership approach, working with you to understand your goals, constraints, risk tolerances and preferences in order to evaluate and implement investment strategies that can help you achieve your goals. We apply our five core capabilities and expertise to create flexible solutions tailored to your needs.
In these times, we believe it is important for insurers to keep a few key messages in mind:
- It is time to focus again on yield generation: Insurers have significantly de-risked their portfolios in recent years. The current low yield environment is making it challenging for insurers' investments to generate sufficient returns. We believe that it is essential to refocus again on yield generation by considering a broader spectrum of growth assets and to strategically diversify your portfolio to help you achieve better risk-adjusted results and consume less capital.
- Capture the equity premium while minimizing volatility on your balance sheet: In the pursuit of economic growth in your portfolio, it is also critical to control the volatility of your balance sheet and minimize short-term risks. Russell has developed a unique series of processes and approaches which aim to capture more of the equity risk premium while simultaneously minimizing short-term risks. We have collaborated with EDHEC-Risk Institute to develop Solvency II Benchmarks based on their independent, objective and academic research. These benchmarks will help insurers invest in equities while aiming to minimize capital consumption. For more information on Solvency II Benchmarks click here.
- Do not ignore active management: Solvency II does not impose additional capital charges for active strategies versus passive strategies – in that sense, alpha is free! We believe alpha can be a strong weapon for insurers as you seek to optimize your investment returns. Russell's capabilities in splitting alpha and beta strategies, identifying high skilled managers across all the different asset classes, and our capabilities to build well diversified multi-asset and multi-manager portfolios to ensure consistent excess returns is responsive to insurers' needs for high risk-adjusted returns.
- Transparency and risk controls are critical: Getting full transparency from managers is essential for insurers. Through our manager-of-managers approach, we provide security-level transparency for insurers' portfolio and risk insights to help you meet your governance, risk management, asset management, and regulatory obligations.
Explore what we can do for your organization.
We are privileged to work with some of the largest financial institutions in the world, helping them solve the most complex investment challenges facing investors today. This experience has helped us become one of the leaders in solving the needs of institutional investors.
To learn more about how Russell can help your organisation, access our regional contact details or fill in our enquiry form here.