The investment management landscape is changing, and insurers are evolving to keep up. The persistence of a low-interest-rate environment has driven many insurance companies to pursue alternative and riskier asset options to enhance returns and offset the steady income decline. Effective oversight of investment portfolios has become critically important and more difficult with increasingly complex strategies. Executive SummaryFinding high-demand investment expertise is a difficult task for insurers. Outsourcing and core-satellite approaches are options, according to a recruiting expert and an investment manager, who also discuss the qualities insurers should seek when they opt to grow talent internally and set risk boundaries for outside managers.
As insurance companies strive to navigate today’s challenging investment climate, how can they ensure they have the talent necessary to effectively manage their evolving portfolios?
The Changing Climate of Investment Management
Prior to the great recession, property/casualty investment portfolios were typically comprised of a mix of investment-grade fixed income and equities. Fixed-income portfolios provided a steady and predictable level of income. Most P/C companies priced policies to make a slight profit or break even and expected that the majority of returns would come from the investment portfolio.