European insurers, struggling with low yield from traditional asses and increasing regulatory oversight demands, are relying more than ever on the expertise of asset managers to run outsourced investment assets, notes consultant Cerulli Associates in its latest Edge Edge—Global Edition report.
Cerulli's research suggests that 29.1% of European insurers expect to reduce the number of third party asset managers they work with over the next 1-2 years. In contrast, just 5.5% expect to increase the number they work with on this basis. Some 16.4% expect no change and 49.1% are unsure.
Only insurers with more than €100bn of assets are expecting an increase, Cerulli says, perhaps because they are better able to cope with the complex oversight associated with outsourcing to many asset managers.
Justina Deveikyte, associate director, European institutional research at Cerulli, said: "Although partnership-type engagement has been triggered by regulatory and economic pressures, the approach is most likely here to stay."
"Simpler oversight and greater investment returns are the two key goals of strategic partnerships. We expect to see continued demand for riskier fixed-income and illiquid assets."
The best-placed managers are those able to broaden the scope of services they can provide beyond traditional insurance expertise, such as matching adjustment, and offer support across the entire investment process.
To read the full report, click here: https://cerulli.com/products-services/cerulli-publications/edge-series/global/?mkt_tok=eyJpIjoiTjJGbE5USXlaVEV6TVRNMSIsInQiOiJ6akZUcFwvcW4yNEZIb3pDOStMeUd4U1RQdGJLSWRGeTJmTXQxM1lxMVlxNHNFaWMzVUhkRDZwN3RJbXRrVUplamtWT1lQRCtCT2N4MlhtdWFIQW5CUlM1UWduRjNvT2V4MXZSOTZyV201SmlcL3VwNkhZV00zRDBkOUpTOUd2OG55In0%3D