Europe's insurers have revealed they had about 2,150 active outsourcing engagements with over 1,000 different named managers for their investments in 2022, according to the underwriters' various public documents scoured by Insurance Risk Data.
The breadth of skilled managers that Europe's insurers are enlisting worldwide belies any expectation that, as interest rates and core fixed income investment yields rose sharply during 2022, the outsourcing of insurance investing would give way instead to widespread insourcing of general account work.
In France's industry - home to Europe's largest aggregated GA and famed for its liking of fixed interest investing – Insurance Risk Data's annual insurance outsourcing report identified 279 acts of outsourcing for which managers were named.
Many insurers suffered their historic fixed income holdings with attractive coupons maturing in greater volume than they could replace with today's rising reinvestment yields – so, on balance, they were losing yield.
France's La Mutuelle Generale de Prevoyance was emblematic here. After heavy bond investing in 2021, it saw its bond portfolio interest drop by €600,000, during 2022.
Phil Manley, director at Insurance Risk Data, said the recent rise in investment yields "has certainly not dampened the desire, nor the need, of Europe's insurance CIOs to outsource investment duties".
He added: "A strong appetite has certainly persisted into 2023 among CIOs, to delegate investment duties to independent and affiliate experts, across the spectrum of asset classes."
Insurance Investment Outsourcing Opportunities - EEA, UK & Switzerland 2024 report, which is being published this month, includes 140 of the 350 pages in the report dedicated to details on each outsourcing engagement – plus more hirings for which the asset managers have not been named, but where other important details of the arrangement such as asset classes, fees or T&C's, have been.
Other sections in the report dissect what the opportunities and must-do's are now for outsourcing partners in light of the recently published UK MA reform details; which risk sub-modules CIOs have 'spent' their market risk capital budget on annually back to 2016; the appetite among mutuals and co-operatives to invest and outsource their combined €1trn GA; and which European insurers want foreign-currency investments, among other topics.