Unravelling investment complexity for insurers
Whatever the market conditions, an investment strategy that aligns with, and supports, the needs of an insurer’s business is critical. Equally important is to be able to retain control of key investment decisions, manage costs and implement strategy in a complex regulatory and operational landscape. Mercer works with insurers to design and deliver investment strategies that reflect their risk, return and capital requirements and align to the regulatory, operational and commercial agenda.
Identifying risks and opportunities in increasingly complex public and private markets can be easier with access to the latest insights. Here are some resources that can help clarify and inform:
An investment insurance consultant understands the complex needs of its clients and can help define a strategy that is relevant to your business.
Implementing a bespoke investment solution on Mercer’s platform can allow clients to execute their strategy in a low cost, efficient and effective way.
We have created a range of tools and resources to help insurers with their investments. Through our platform, MercerInsight®, our insurer clients can access a suite of analytical tools to help select managers, implement mandates and make informed investment decisions. Learn more today.
Drawing on 20 years of insurance consulting heritage, we design bespoke investment strategies aligned to client’s needs. We cover asset liability management, investment policy and strategy design, strategic asset allocation, portfolio optimisation and construction. In addition we undertake manager searches and selection, capital markets research, dynamic asset allocation, ESG integration and transition management.
Our open architecture model allows our insurance clients to implement their investment strategy across public and private markets through passive and active approaches. It enables them to ensure ESG is embedded across the entire investment process. Our platform is underpinned by regulatory, capital and financial reporting, with our staff and resources providing support on often pressurised internal teams.
Introduced implemented consulting, including dynamic asset allocation
Enhanced data and risk program
Expanded manager roster and cost reduction
Reduced operational and reporting complexity
A global marine insurer needed to adjust to a new operating model. This highlighted limited internal resourcing and an inability to execute and nimbly adapt its investment strategies. The in-house team wanted to retain control of manager selection, but also explore new investment opportunities to capture yield, including the utilization of private markets.
We began working with the insurer in an advisory capacity, before progressing to an implemented consulting and discretionary DAA relationship. The insurer was able to retain its existing fund managers, but expand and diversify with other high-quality providers identified by Mercer. We introduced detailed data and risk analytics, which enabled the insurer to enhance its governance structure. This also helped simplify and streamline the operating model, given multiple group entities, as well as leading to lower costs for the insurer.
Mythbusters / Q&A |
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Why Mercer for insurers? |
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The growing complexity of insurers’ investment programs requires experience and expert technical knowledge, supported by dedicated resources and infrastructure. Mercer is the world’s largest insurance investment advisor,1 operating across multiple geographies and lines of business, covering P&C, health, P&I, life, reinsurance, captives and speciality. Our services are delivered by a team of insurance specialists made up of actuaries, technical analysts and CFAs. They sit alongside industry practitioners who have practical experience of working with and for insurance companies. We work closely with our affiliates across Marsh McLennan – Guy Carpenter, Oliver Wyman and Marsh - bringing together a unique understanding of all aspects of the insurance balance sheet. 1 The Insurance-Focused Investment Consultant Compendium, October 2020. $423 billion under advisement across 118 clients globally. |
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I have an in house team – how does Mercer support me? |
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We work as an extension of your team, not a replacement. Mercer’s open architecture platform ensures we are not affiliated to any one asset manager and that we bring an independent perspective. Our ability to customise solutions to your specific requirements means you can execute your strategy on our platform through your in-house team, external managers or a combination of both. We provide the necessary infrastructure, resources and people to allow you to focus on investment decisions and overall objectives. We provide the regulatory, investment and capital reporting to support your internal governance and decision making. |
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I want to allocate to alternatives but don’t have the resources – how can Mercer help? |
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Insurers are increasingly keen to allocate to alternatives and private markets, but many do not find them straight-forward strategies to implement or maintain. Additional costs from origination, investment, legal activities and operational due diligence, alongside commitment planning, capital calls and distributions, add to the complexity of private market investing. We work with our insurance clients to help them access private markets in a variety of ways:
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Responsible investing is high on my agenda – how does Mercer help me? |
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We have a dedicated team of 24 responsible investment specialists globally, advising investors on all aspects of environmental, social and governance (ESG) factors. This team has been in place since 2004, when Mercer was the first global investment consultant firm to create one – by more than a decade. We provide responsible investment support to insurers to help protect your reputation, enhance governance, help meet regulatory obligations and improve long-term returns.
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What is Mercer’s approach to diversity and inclusion in investing? |
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We consider a commitment to diversity and inclusion to be part of our social responsibility. Diversity is one of our core values, and our diversity efforts centre on our commitment to our employees, clients and the communities in which we work. Our Environmental, Social & Governance Committee is ultimately responsible for diversity and inclusion, including monitoring and reporting on it. |
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