Insurance Investment Outsourcing Exchange and Clearwater Analytics Issue 2022 Insurance Investment Outsourcing Report
Third-party investment management assets to expand 15% in 2021
BOISE, Idaho, July 11, 2022 /PRNewswire/ — Clearwater Analytics (NYSE: CWAN), a leading provider of SaaS-based investment accounting, reporting and analysis solutions, and The Insurance Asset Outsourcing Exchange today announced its publication. 2022 Insurance Investment Outsourcing Report. This Ninth Annual Report shows a sustained substantial increase in insurance companies’ use of third-party investment management solutions.
Twenty-eight investment management firms reported total third-party general account (GA) assets of $3.4 trillion on a global basis as of the end of 2021. This is compared to forty-nine managers reporting $2.9 trillion in last year’s 2021 edition, an increase globally. Assets Under Management (AUM) 15%. Regionally, North America AUM registered an increase of 18%, Europe/UK recorded a growth of 10% and APAC 14%.
behind the numbers
Double-digit asset growth comes from insurers seeking to take advantage of the scale, services and specialized expertise offered by third-party investment management firms. David Holmes, founder of Insurance Asset Outsourcing Exchange, said, “The insurance industry has grown despite the consolidation and challenges of COVID.”
According to exchange data and analysis, three factors contributed to the increase in last year’s AUM:
- Large insurers continued to outsource multi-billion core fixed income mandates. These properties found homes with investment managers well equipped with the scale, services and range of investment solutions to meet their needs.
- Insurers are increasingly looking for specific investment mandate solutions. The Exchange’s Insurance Asset Tracker database logs increased outsourcing to private placements (both debt and equity), specialized fixed income strategies, public equity, and in particular, alternative investments. These mandates are often funded with cash flow, and their AUM growth has become more pronounced year over year in the reported outsourced AUM.
- Mergers and acquisitions have changed the demographics of the insurance industry. The very large insurers are increasing in numbers and AUM at the expense of smaller insurers. It supports both large multi-billion dollar rewards for increasing diversification to managers offering demographic change services and scale, and specialist third-party managers and those with broad strategy expertise.
Alternative investment third-party management boomed
In recent years there has been a rapid increase in insurers’ outsource investments to alternative investment managers. New mandates in alternative investments, reported in the Insurance Asset Outsourcing Exchange’s Insurance Asset Tracker database, accounted for 24% of all new mandates in 2021, 18% in 2020 and 14% in 2019. Private loans and private equity comprise most of the option category. , Clearwater Analytics has seen similar trends in insurer assets on its multi-trillion-dollar investment analytics, reporting and accounting platform.
“In our client base, we see material growth, with most investors recently increasing their allocations by 25% in non-traditional asset classes such as bank loans, private placements, commercial mortgages, and private funds/LPs with a variety of underlyings. Strategies,” said Scott Erikson, president, New Markets in America and Clearwater Analytics.
Steve Doyer, Head of Strategic Client and Platform Advisory, Clearwater Analytics, said, “Insurers of all sizes are considering new asset classes, but are outsourcing that strategy to trusted advisors with scale and expertise in these specific classes. As alternative investments increase, so does the complexity of accounting, where Clearwater enables further efficiencies.” For more information on the key findings of this report and to participate in upcoming webinars and information sessions, visit Clearwater’s website here.
About Insurance Investment Outsourcing Report
The report, in its ninth year, outlines investment management firms that provide the specialized resources and expertise needed to manage the investment assets of insurance companies. The Insurance Investment Outsourcing Report is published by Insurance Asset Outsourcing Exchange in partnership with Clearwater Analytics. The report can be downloaded here.
About Insurance Asset Outsourcing Exchange
Insurance Asset Outsourcing Exchange, a service of Eager, Davis & Holmes LLC, promotes knowledge of insurance companies’ use of third-party investment manager solutions, including business lines, company size and sector-specific investment needs. Are included. Participants on the exchange include nine of the top ten investment managers ranked on insurance AUM, other specialty-focused investment managers, insurance-focused investment consulting firms, and insurance companies from around the world. More information is available at Eager, Davis & Holmes LLC
About Clearwater Analytics
As an industry-leading SaaS solution for investment accounting and reporting, Clearwater enables asset under management (AUM) growth for over 1,100 clients, including pension plans, governments, global insurers, asset managers and corporations. Clearwater automates data collection, reconciliation, compliance, risk and performance reporting of $5.9T AUM every day with its comprehensive cloud platform and best-in-class service team. Additional information about Clearwater can be found at clearwateranalytics.com, LinkedIn and . can be found on ,
Source Clearwater Analytics
