NU Online News Service, JULY 30, 1:33 p.m. EDT
The number of insurers using third party investment managers is rising quickly, according to data compiled by a consulting firm.
A report from the Louisville, Ky.-based Insurance Asset Outsourcing Exchange says that a record $28.5 billion was outsourced in the second quarter of 2009.
David Holmes, Partner in the Louisville, Ky., consulting firm Eager, Davis & Holmes, which founded the Exchange, said, "The credit crisis has been a catalyst for self-examination by insurance CEO's and CIO's. They have become more open to change and the notion that the outside expertise and resources of an investment manager or consultant can make a difference."
Total assets outsourced in the first six months of this year exceeded those outsourced over all of 2008. And assets outsourced in 2008 surpassed 2007 by 20 percent, according to the Exchange.
During that time, the average mandate size increased from $157 million in 2007 to $352 million over the first half of 2009, the report said.
Mr. Holmes noted, "Large insurance companies typically outsourced relatively small mandates in alternative investments or equities a few years ago. Now we are seeing more large multi-billion dollar broad fixed income mandates outsourced to third party managers."
The report, titled "Insurance Asset Tracker Outsourcing Activity Update," is available free to insurance company investment officers who can request it through the Exchange Web site at:
The Insurance Asset Outsourcing Exchange promotes knowledge about third party insurance asset management and serves insurance companies, investment managers and investment consultants.
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