A consulting firm said insurance companies and investment managers are helping it create a “groundbreaking” database that gathers information helpful to insurance companies with asset management outsourcing decisions.
The Insurance Asset Outsourcing Exchange, a service sponsored by consultant Eager Davis & Holmes, is gathering information from insurance companies and investment managers on a confidential basis, aggregating and analyzing the data, and will share the information with Exchange participants, the company said.
Eager Davis & Holmes explained that insurance companies will benefit from specific knowledge about the types of investment mandates their peers are outsourcing and which investment managers they hire.
As an example, the company said, if an insurance company notices an investment manager being hired for a specific type of investment strategy, they may want to learn more about what that manager is doing. Or if they see a trend building in the use of a particular type of investment strategy, they may want to consider if that strategy is right for them.
More than 100 insurance companies and a majority of the top 25 insurance asset managers are currently participating in launching the Exchange, representing a significant percentage of the $900 billion of general account assets that U.S. insurance companies currently outsource, the company said.
“Reliable information about insurance companies' investment outsourcing needs and practices is lacking in comparison to other institutional markets,” said David Holmes, a partner at Eager Davis & Holmes. “We are applying the same research tools used in the retirement asset market to address the gap.”
The Exchange, Eager Davis explained, is building a database of information about each mandate outsourced to third-party investment managers, including asset class, investment style, consultant used (if any), investment vehicle (separate account, commingled fund, etc), associated services provided, and other attributes.
Additional information that will be available through the Exchange includes fee data, research on insurance companies' investment goals and strategies, and insurance companies' investment manager selection practices.
“We have been greatly encouraged by the initial response to the Insurance Asset Outsourcing Exchange from insurance companies and third-party asset managers alike,” said Mr. Holmes.
He added, “In the coming months, the Exchange should prove an excellent tool for evaluating insurance companies' reactions to the current market challenges. We are encouraging more insurance companies to participate in the service and expand the database for the benefit of all our members.”
Insurance Asset Outsourcing Exchange is online at http://www.assetoutsourcingexchange.com.
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