- Insurers manage their asset portfolios in a multidimensional and complex environment, combining multiple objectives and constraints. Recent history shows that all parameters are interdependent and evolving, including sudden and non-linear macro shocks
- Beyond current circumstances, insurers should contemplate how they can strengthen their investment and risk management frameworks – and consider exploiting a broader set of asset classes and investment management techniques
- Enhancing investment and risk management frameworks is not straightforward and requires reinforced resources, skills, tools and processes. Insurers may have to make strategic decisions to determine the optimal level of outsourcing, from building blocks to more holistic solutions
By Arnaud Lebreton, Head of Client Relationship Management
We live in a complex, uncertain and fast-changing world, where organisations need to adapt to thrive – and this is especially true for insurance companies, whatever their market or business line. Insurers manage balance sheets and asset portfolios in complex, and multidimensional, local and global frameworks. They must build and manage a portfolio which matches their liabilities while protecting and stabilising their economic and regulatory capital position.
In addition, insurers need to navigate macroeconomics, alongside financial markets, and maximise policyholder and shareholder investment returns in a risk-controlled manner.
They must steer their financial results and contain profit and loss volatility under different accounting standards and factor in sustainability, climate risk and impact on society.
These are all dimensions which need to be taken on board by insurers, and the equation is becoming ever more complex as these parameters are interdependent and evolving over time.
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