CINCINNATI–(BUSINESS WIRE)– Ward Group, a consulting firm specializing in the insurance industry and the leading provider of benchmarking practices, recently published its findings from an in-depth study of Portfolio Management and Insurance-Company Owned Life Insurance (ICOLI) practices for insurance companies. A diverse group of 43 companies participated in this study that focused on portfolio management structures, investment strategies and current market perspectives. Key findings and observations were presented to participants in a webinar hosted by Jeff Rieder, President of Ward Group and Richard deBart, CEO at The deBart Group Inc. who discussed earnings strategies through the use of ICOLI on January 12, 2010.
Although the average participant’s invested assets improved 4.7% through the first 9 months of 2009, the economic down cycle has affected investment behaviors for both short-term and long-term investment strategies. 92% of companies reported their long-term investment strategy has been affected and 87% of companies reported their tolerance for investment risk and short-term volatility has changed due to the economy. Mr. Rieder observed that many companies have stopped thinking in traditional ways. “We have seen insurance companies change behavior around many aspects of the business from long-term business strategies and corporate infrastructure to the way they view their investment portfolio,” noted Mr. Rieder.
The study identified several notable trends:
The study also pointed out some differences between opportunities and behaviors acting upon them. For example, 87% of companies responded that deferred tax treatment would favorably impact their portfolio. Most companies responded they would also like to increase alternative investments and equity exposures, yet only 11% of companies utilized ICOLI to improve the efficiency of the investment portfolio. “It appears the majority of companies utilize ICOLI only for the life insurance benefits,” observed Mr. deBart. “Relatively few insurance companies have utilized ICOLI as an investment strategy, potentially due to lack of familiarity with ICOLI products or how it can improve investment performance.”
To obtain complete results of the Portfolio Management Study, including benchmarks for investment guidelines, expenses by asset class and other data related to portfolio management practices, visit www.wardinc.com.
About Ward Group®
Ward Group is a consulting firm specializing in the insurance industry and the leading provider of industry benchmarking and best practices services. Ward Group analyzes staff levels and expenses for all areas of insurance company operations. For more information about Ward Group and the Ward Research Center, visit www.wardinc.com.
About deBart Group
The deBart Group is a New York-based benefit group and specialists in funding corporate benefit liabilities. The firm partners with major life insurance and financial services providers to bring customized solutions to its clients.
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Source: Ward Group