Insurers to rely on specialised asset management

To address the problems of low interest rates and the stringent European Solvency II regulation, insurance companies seek the help from asset managers. According to research from the Italian consultancy Prometeia, €1 trillion could flow to asset management companies. Asset managers could thus manage €4.5 trillion on behalf of insurers by the end of 2019, says the report based on a survey of 60 institutions with total assets of €22 trillion.

However, some asset managers have an advantage when appropriating parts of those investments. Prometeia expects that due to an increase in demand for exotic asset classes such as high-yield bonds, bank loans, real estate debt and infrastructure, insurers will rely more on specialised independent asset managers. But while many insurers and banks have specialised in-house asset managers serving external insurance clients, Prometeia finds that only a third of independents asset manager have teams dedicated to the specific requirements of insurers.