Insurers into asset management?
IPE’s survey finds interest in undertaking third party business but many groups have yet to decide
Insurance company-owned asset managers seem to be making their mark on the investment world, according to a survey by InterSec Research in London.
“Insurance company-owned asset managers have significantly increased market share, with more than double the proportion of the number of mandates of four years ago,” says InterSec. Some 10% of mandates are being won by insurance owned asset managers, compared with just 4% then.
The inroads the insurance companies are making seems to be at the expense of bank owned asset managers, says the research firm. While independent asset managers have maintained the market share of just over 35%, bank owned entities have seen their share drop from 65% to 58% – a 10 percentage points drop.
Among the major insurance groups to announce such moves are the German giant Allianz whose Allianz Asset Management aims to organise the entire asset management activities in tradable securities for the whole group, and the Edinburgh-based Standard Life, Europe’s biggest mutual insurer. Since the start of this year, Aegon Asset Management started operations as an independent manager within the huge Dutch insurance group. It works alongside other group companies, such as Scottish Equitable in Edinburgh and Aegon USA and Transamerica in the US. “We are aiming for institutional asset management in the Dutch and continental European markets,” says Frans van der Horst of Aegon in the Netherlands. It has $10bn of assets managed mainly for Dutch pension funds.
The InterSec survey among 300 investment officers in 14 European countries controlling some E1.5trn in assets also looks at the trends to using external managers by pension funds and insurance companies.
Insurance companies are the least likely of institutional investors to outsource, as they only outsource 9% of their assets. The average insurance sponsored mandate was E378m, compared with those by private sector pension funds at E262m, or those by public sector pension funds at E277m.
The survey says the private sector funds are most likely to externalise their asset management, with around 50% of these funds doing so. Public sector funds are less likely to do so, with 31% of their assets being externalised, still well ahead of insurance companies. Fennell Betson