The Insurance Asset Manager (IAM) Annual Survey 2010 Edition, published last week, reveals that the financial crisis prompted a sharply higher number of the world’s largest insurance companies to seek outside expertise to help manage their investments.
The IAM Survey, which analyzed data from 50 US-based investment firms that specialize in managing outsourced insurer assets, showed a total of $1.47 trillion in insurance company general account and subadvised assets as of Dec. 31, 2009 -- an increase of 32% compared with the Dec. 31, 2008 total of $1.11 trillion. Third-party general account assets under management (AUM) topped the $1 trillion mark for the first time.
The number of multi-line insurer clients retained by the IAM Survey’s universe of 50 third-party investment managers totaled 104, an increase of 90% compared with 55 at year-end 2008. It was the crisis, according to industry observers, that encouraged very large insurers to shed traditional reservations and add external investment skills to their established in-house capabilities.
By comparison, this same group of investment managers reported 7% increases in both single-purpose property & casualty (P&C) and reinsurance company clients (945 vs. 883 and 179 vs.167, respectively) and a 2% increase in life/health (L/H) company clients (753 vs. 740).
Commented Gary J. Madich, chief investment officer of JPMorgan Asset Management's global fixed income group, “It was time to put a better focus on the investment portfolio and to figure out how it translates back to the balance sheets, assets and liabilities, and core businesses.”
BlackRock took first place in the IAM Survey rankings. Second was Deutsche Insurance Asset Management, followed by GR-NEAM, Conning and Wellington. Propelling BlackRock to the top of the leaderboard was a 59% year-on-year jump in general account insurance assets, to $191.27 billion. Deutsche, while giving up its perennial top spot to BlackRock, also had an excellent year, ending with $172.80 billion.
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Insurance Asset Manager (IAM) is a news and information service that covers the investment management side of the insurance industry for insurers and their third-party providers -- including asset management firms, investment consultants, legal advisors and other intermediaries.