Among those who have outsourced in part. are Swiss Reinsurance Co., which turned over the keys to it bond portfolio, and Allstate Corp, which transferred its stock-picking duties. Zurich Financial Services AG has parcelled out 70% of its portfolio.
While it’s a low-margin business for the money managers, they are building insurance practices. The insurance companies indicate that outsourcing allows for a leaner in-house investment strategy team. And money management firms aren’t the only ones picking up assets. Prudential Financial Inc. manages more assets for others than it does for itself.
It’s estimated that assets no longer managed in-house have climbed from just over $800 billion to almost $1.2 trillion since 2006. Still, that’s a drop in the bucket. There’s a lot of assets that haven’t trickled away: total insurance assets are $18 trillion.