For insurance companies, the investment landscape has evolved significantly in recent years, in large part due to macroeconomic challenges, leading to diversification from traditional asset classes to notable allocations such as real estate, private equity, and debt.
Managing multiple asset classes has introduced a new set of challenges for insurance asset owners, including risk and regulatory considerations. The pressure is on insurance asset owners to drive efficiencies while managing increasingly diverse and complex portfolios.
In this article, we’ll explore the critical role technology is playing in this transformation, including how asset owners can effectively leverage their tech stack to enhance their efficiency in pursuit of targeted returns.
Resource challenges in managing complex portfolios
Managing a diverse range of assets requires highly skilled teams to manage, analyse, and report on performance, but a competitive job market has made it difficult for insurers to hire and retain experienced professionals across a wide range of roles, from administration to portfolio management.
When resources are stretched thin, consolidating portfolio data into a single source of truth is critical to ensure accurate decision-making. Without the staffing volume to efficiently compile and analyse data, asset owners often can’t access a holistic view of their portfolio, making data-driven decisions a challenge.
How technology helps address these challenges
- Aggregated reporting and analytics: Portfolio management systems and data aggregation tools allow for high-level data consolidation, providing a bird’s-eye view of diverse portfolios across asset classes. Users can manage exposures, quantify their total performance, and forecast with accuracy. They can even streamline extraction and delivery of monthly information for regulatory SOLVENCY II reporting to a third party for verification and submission
- Efficiency in portfolio management: Technology also helps streamline processes, allowing insurers to respond quickly to market changes and stay ahead of the competition. The best fully managed solutions eliminate the need for firms to allocate internal resources for managing, developing, or maintaining tech platforms. Efficient operations enable clients to focus instead on core activities that directly add value
- AI and machine learning: Artificial intelligence (AI) tools can help automate tasks, analyse vast datasets, and offer predictive insights for faster (and more accurate) decisions. Asset owners can receive automated alerts if key performance metrics have changed, informing discussions with actionable intelligence. When properly trained, AI tools can be highly attuned to your specific needs, creating a custom solution built around your unique requirements
Technology will offer a significant edge
Technology already plays a key role in overcoming resource constraints for insurance asset owners, making it easier to administer and monitor asset portfolios even as they grow more diverse. AI and other emerging tech will continue to offer a significant edge for forward-looking asset owners as new opportunities emerge.
In short: the better your tech stack, the more likely you are to achieve top tier returns and outperform your competitors.
How IQ-EQ can help
As an asset administrator, we review, consolidate, and visualise data in one centralised and secure platform so the asset manager can see a holistic view in one place. Dashboards are easily exportable, improving transparency and communication.
Looking for a solution to your data and reporting challenges? Contact our team for a demo of Cosmos, IQ-EQ’s industry-leading multi-asset class reporting and portfolio monitoring platform.
About the author
Shaun is IQ-EQ’s Global Head of Insurance. Shaun has 20 years of experience in the financial services sector across multiple product segments, including insurance, funds, corporate and private wealth. He’s a member of the South African Institute of Chartered Accountants and has worked in South Africa, Cayman Islands, Mauritius, UK and U.S.
