Life investment team - Phoenix Group

Insurance Asset Risk Awards 2018

Phoenix's investment team stood out from the rest for successfully undertaking some difficult transactions as the company has overhauled its investment management
structure in the last few years. Two of the men heavily involved with this are Scott Robertson, head of the financial management group (FMG), and Daniel Blamont, head of investment strategy – also winner of the Young Professional of the Year award.

The pair have introduced an investment strategy focused on improving the diversification and risk-adjusted yield by investing in illiquid private assets and creating bespoke mandates for public assets tailored to Phoenix's requirements.

Robertson has led the push into equity release mortgages (ERM) in recent years – Phoenix acquired a £600m ($812m) chunk of ERMs from a third-party last July, the largest equity release backbook ever bought by an insurer – while Blamont has advocated investing in illiquid assets and implemented that strategy in collaboration with the Phoenix Life team. At the same time, the team has been central to developing a group-wide hedging structure. The catalyst for this came with the purchases of
Axa's SunLife and Embassy businesses and Abbey Life, following which Henrik Wijkander, head of Phoenix Life Investment Risk, has worked with Blamont to embed the hedging process into the company's daily activities. A new ALM risk management framework was embedded in the life company subsidiaries to improve the control and management of interest rate risk after the lessons learned in 2016, and Blamont structured a portfolio of interest rate derivatives to protect Phoenix Life's solvency position against adverse rate scenarios around the Brexit vote.

Last year Phoenix issued a $500m bond which required a cross-currency swap to be put in place to hedge out the currency risk. The process was carried out entirely in-house with a conscious focus on leaking as little to the market as possible.

"It was a big size issue so you can't phone banks and ask for a price," Blamont explains. "FMG did the pricing and structuring and counterparty selection because no asset manager exists at group level to execute trade on our behalf." The result for Phoenix Group is a more efficient use of capital, greater risk diversification and higher potential returns, offering value to shareholders and increased protection for policyholders. These achievements would not be possible without a collaborative approach.