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.