With volatility continuing to affect insurance investment returns and risk management, governance is increasingly essential in navigating the current market environment and ensuring portfolios remain resilient.

In this episode of Critical Thinking, Andreas Vermeiren, Principal in Mercer’s Insurance Solutions team, is joined by William Gibbons, Principal in the Insurance Solutions team, and Eryn Bacewish, Head of US Insurance Solutions, to discuss their thoughts on risk management in insurance portfolios in a period of market volatility. Drawing on their conversations with clients, William and Eryn break down the importance of stress testing portfolios to ensure they remain resilient and highlight opportunities available for insurers who have the flexibility to make dynamic allocations.

In this episode, William Gibbons, Senior Insurance Investment Consultant at Mercer, is joined by Tom Davies, Head of UK Placement, Marsh, and Olaolu Aganga, US Chief Investment Officer, Mercer, to explore how non-life insurers can potentially capture opportunities while maintaining resilience in an economic and market environment that's in a state of flux. The conversation covers how diversification could help insurers achieve long-term portfolio resilience, adapting to a new insurance market cycle, and how insurers can potentially enhance client offerings.

In this episode of Critical thinking, Amit Popat, Global Head of Financial Institutions at Mercer, is joined by David Morrow, European Insurance Proposition Leader, and Stephanie Thomes, a Senior Investment Strategist in Mercer’s Insurance team, to explore Mercer’s outlook for insurers in 2025. This year’s paper reflects a transitional phase for the economy, defined by shifts in structural factors such as monetary policy, geopolitical uncertainty, and technological and regulatory innovation that requires a broader and longer perspective. These challenges will require thoughtful navigation, particularly for investors with a longer-term investment horizon, such as insurers. 

Key takeaways include:

How investment risk can serve as a stabilising force for insurers: When underwriting results are under pressure from increased claims and reduced premium income, investment risk can be strategically advantageous because there’s limited correlation between economic cycles and underwriting cycles. While underwriting performance is influenced by market conditions and competitive dynamics, investment returns can provide a stabilizing effect.  

What strategies insurers can adopt to navigate a challenging environment, where recent fluctuations in interest rates have affected bond-oriented portfolios: There is considerable uncertainty about the direction of travel for markets in general, so insurers should consider modelling how their portfolios would perform under various scenarios, and to increase diversification, within the confines of acceptable risk and regulatory capital constraints.  

How the growing number of semi-liquid and evergreen fund structures in private markets is changing the landscape for insurers: As private markets continue to evolve to meet the news of their investor base, semi-liquid and evergreen funds make it easier for small investment teams to participate in private markets, making it easier to maintain a target percentage allocation, relieve some of the administrative and operational burden of re-ups, and can relieve blind pool risk.

Remarkable growth in the captive insurance space has been driven by a range of factors over the recent past  – from an extended hard market to the expansion of risks requiring underwriting. 

In our latest episode of Critical Thinking, we dive into the world of captive insurers as William Gibbons is joined by Ellen Charnley, President of Marsh Captive Solutions, and Chris Tschida, Head of US Insurance at Mercer.

Join Amit Popat, Eryn Bacewich and Joshua Zwick as they unpack the findings from our Mercer and Oliver Wyman 2024 Global Insurance Investment Survey in the latest episode of Critical Thinking. 

They dive into the key investment themes, outlook and risks highlighted by the survey and assess the road ahead for insurance portfolios through the second half of the year.

Read the full survey report here.

Recent market experiences have highlighted the importance for insurers to construct robust portfolios that not only support their primary business, but also enable them to respond to evolving market risks and opportunities.

In this episode, Marieke de Roo is joined by Francesco Martorana, Chief Investment Officer at Generali and Mercer colleague David Morrow live from the Global Investment Forum in Dublin. Together they unpack what it means to build agile portfolios in today's insurance landscape and discuss how insurers can navigate the ever-changing market dynamics and seize potential opportunities.