Challenges abound for Insurance only Asset Managers
I think this is an excellent article exploring some of the consequences of the systemic shift in operating environment (economic, regulatory and investment return) on insurers’ own investment management operations.
Including asset management in a broader operating matrix is becoming an increasingly persistent headache for many firms. One issue not directly addressed by the author however is effectively competing in the third-party asset gathering arena. Some, like the Prudential’s M&G have had great success (even in the cut-throat world of retail funds in M&G’s case ); others have refocused their efforts closer to their core expertise; others still (LV) have retired from the third party market altogether. There is an argument that having a safety net of captive assets does not foster a commercially aggressive or marketing-driven environment. The other side of this argument should not be forgotten however: the very reason that these asset management firms exist in the first place is entirely due to their captive client. There is no easy answer.