BlackRock leads pack in Bermuda insurers' investment outsourcing

Channels: Managers, Outsourcing, Systems/data, Tax/accounting, SFCR

Companies: BlackRock, Clarien Bank, Colonial Group International, Aspen Limited, For Assured Guaranty Re, Assured Guaranty Overseas, Sompo International Holdings

BlackRock has topped the list of third-party asset managers enlisted by Bermudian insurers, according to primary research by Insurance Risk Data.

The data arm of Insurance Asset Risk analysed 50 of the 2018 Financial Condition Reports (FCRs) – Bermuda's somewhat less detailed equivalent to Solvency II's solvency and financial condition report (SFCR) – and found that BlackRock was mandated by six of the 28 Bermudan insurers who disclosed their external asset managers for 2018.

A further 19 Bermudian insurance entities acknowledged outsourcing the management of their investments, and sometimes noted whether the arrangements were intragroup or not, but declined to name the manager they had mandated.

Running close second to BlackRock was Bermuda's Clarien Bank, whose subsidiaries acted for the Bermudian insurers of Colonial Group International. Clarien and Colonial are related through common control, according to Colonial's FCR.

BlackRock was enlisted by the underwriters to perform an array of activities.

Aspen Limited hired BlackRock for investment accounting duties. For Assured Guaranty Re, Assured Guaranty Overseas and Sompo International Holdings, the delegations to BlackRock were at least for investment management. Greycastle Life Re SAC also named asset management as reason to enlist BlackRock Investment Management, alongside Western Asset Management and JP Morgan Asset Management. But Greycastle named, separately, Blackrock Client Portfolio Solutions for 'chief investment officer (CIO) services'.

Insurance Risk Data analysis found 'outsourced CIO' came up fairly rarely as a delegated activity among Bermudian underwriters.

Other independent managers picking up work last year included Goldman Sachs Asset Management, Wellington and New England Asset Management – mirroring the trio's success among Lloyd's syndicates.

Bermudians also farmed out work to affiliates where possible, giving work to the likes of XL Group Investments (from XL Catlin entities), and Legal & General Investment Management (Legal & General Re).

• The details of more than 1,000 insurers' outsourcing arrangements, including details variously on the manager, the nature of the engagements, and reasons for delegating, will appear in a comprehensive report on the topic being published by Insurance Risk Data later this year. The information will encompass Bermudian and Swiss insurers, as well as EEA underwriters and individual Lloyd's syndicates. To find out more about Insurance Risk Data and various reports it has planned for 2019, please email scott.davis@fieldgibsonmedia.com

David Walker