Third-Party Investment Management Assets Expand 15% Over
2021
BOISE, Idaho, July 11, 2022 /PRNewswire/ -- Clearwater
Analytics (NYSE: CWAN), a leading provider of SaaS-based
investment accounting, reporting, and analytics solutions, and The
Insurance Asset Outsourcing Exchange, today announced the
publication of the 2022 Insurance Investment Outsourcing Report.
This ninth annual report finds continued substantial growth in
insurance companies' use of third-party investment management
solutions.
Fifty-eight investment management firms report third-party
general account (GA) assets totaling $3.4
trillion on a global basis as of year-end 2021. This
compares with forty-nine managers reporting $2.9 trillion in last year's 2021 Edition, an
increase in global assets under management (AUM) of 15%.
Regionally, North America AUM posted 18% growth, Europe/UK posted 10%, and APAC 14%.
Behind the numbers
The double-digit asset increase
results from insurers seeking to leverage the scale, services, and
specialized expertise offered by third-party investment management
firms. David Holmes, founder of the
Insurance Asset Outsourcing Exchange, observed "growth occurred
despite headwinds from insurance industry consolidation and
challenges of COVID."
According to Exchange data and analysis, three factors
contributed to the past year's AUM increase:
- Large insurers continued outsourcing multi-billion core
fixed income mandates. These assets found homes with
investment managers well-equipped with the scale, services, and
range of investment solutions to meet their needs.
- Insurers continue to increasingly seek specialized
investment mandate solutions. The Exchange's Insurance Asset
Tracker database logs increased outsourcing in private placements
(both debt and equity), specialized fixed income strategies, public
equities, and in particular, alternative investments. These
mandates are often funded with cash flow, and their AUM growth has
become more apparent in reported outsourced AUM year over
year.
- Mergers and acquisitions have altered insurance industry
demographics. Very large insurance companies are growing
in number and AUM at the expense of smaller insurers. This
demographic change favors both large multibillion-dollar awards to
managers offering services and scale, and increasing
diversification to specialist third-party managers and those with
broad strategy expertise.
Alternative investments third-party management up
sharply
Insurers' outsourced investments to alternative
investment managers have increased sharply in recent years. New
mandates in alternative investments reported to the Insurance Asset
Outsourcing Exchange's Insurance Asset Tracker database comprise
24% of all new mandates in 2021, up from 18% in 2020, and 14% in
2019. Private debt and private equity comprise most of the
alternatives category. Clearwater Analytics has seen similar trends
in insurer assets on their multi trillion-dollar investment
analytics, reporting, and accounting platform.
"Across our client base, we see material growth, with most
investors recently increasing their allocations by more than 25% in
non-traditional asset classes such as bank loans, private
placements, commercial mortgages, and private funds/LPs with a
variety of underlying strategies," said Scott Erickson, President, Americas and New
Markets at Clearwater Analytics.
Steve Doire, Head of Clearwater
Analytics' Strategic Client and Platform Advisory, added, "Insurers
of all sizes are considering new asset classes but outsourcing that
strategy to trusted advisors with scale and expertise across these
specialty classes. As alternative investments increase, so does the
complexity of the accounting, which is where Clearwater further enables efficiency."
For more information on the key findings in this report and to
participate in upcoming webinars and information sessions, visit
Clearwater's website here.
About the Insurance Investment Outsourcing Report
The Report, in its ninth year running, profiles investment
management firms who offer the specialized resources and expertise
required to manage insurance companies' investment assets. The
Insurance Investment Outsourcing Report is published by the
Insurance Asset Outsourcing Exchange in partnership with Clearwater
Analytics. The report can be downloaded here.
About the Insurance Asset Outsourcing Exchange
Insurance Asset Outsourcing Exchange, a service of Eager, Davis
& Holmes LLC, promotes knowledge about insurance companies' use
of third-party investment manager solutions, including investment
needs specific to business lines, company size, and region.
Exchange participants include nine of the top ten investment
managers ranked on insurance AUM, other specialty-focused
investment managers, insurance-focused investment consulting firms,
and insurance companies around the globe. More information is
available at https://assetoutsourcingexchange.com/ and Eager,
Davis & Holmes LLC
About Clearwater Analytics
As the industry-leading SaaS solution for investment accounting
and reporting, Clearwater enables
growth of assets under management (AUM) for more than 1,100 clients
including pension plans, governments, global insurers, asset
managers, and corporations. Each day, Clearwater automates data collection,
reconciliation, compliance, risk, and performance reporting across
$5.9T of AUM with its comprehensive
cloud platform and best-in-class service
team. Additional information about Clearwater can be found
at clearwateranalytics.com, LinkedIn, and Twitter.
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SOURCE Clearwater Analytics