Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
JANA recruits from within for new insurance role
JANA Investment Advisers, Australia’s largest asset consulting firm, is expanding its insurance business, which until now has been most developed in the health insurance sector, with the creation of a new role as ‘head of insurance strategy’, to be filled by Greg Wilkinson.
Wilkinson, currently a senior consultant and a member of JANA’s global equities research team, joined the firm in 2014. He will now lead a significant expansion of the firm’s advisory services with the insurance client base. He is an actuary, who has worked in the UK and Australia as a consulting actuary for 16 years prior to joining JANA. According to the Actuaries Institute, 40 per cent of Australia’s actuaries work in the insurance sector.
Jim Lamborn, chief executive, said demand for its services had been growing across the insurance sector and the new role would provide additional, specialised support to clients. “Greg’s appointment will enhance our capability to provide support and solutions for our insurance clients. It will enable our clients to benefit from the depth of JANA’s expertise and deliver stronger investment results,” he said.
The expansion of JANA’s insurance focus is in response to the increasingly complex needs of the sector, which is facing lower premium revenue and increased potential claim experience. These challenges are exacerbated by COVID-19 leading to further reductions in forward-looking returns from many asset classes. This is particularly pertinent for insurers who rely on investment returns from traditional defensive assets, such as fixed interest and cash, to support their businesses, the firm said in a statement.
Lamborn said: “We have been advising the insurance market since 2004, and our current insurance clients have over $9 billion in assets under management. We have created the head of insurance strategy position to allow us to build the support we provide to our clients. Greg’s appointment and industry expertise will deliver significant uplifts in our capability in regulatory advice, digital solutions and modelling support to our clients.”
Wilkinson said: “In this role I will be leading a team drawing on JANA’s extensive research and asset management capabilities to build upon our already well-established health insurance portfolio and expand our capabilities for the benefit of the Australian insurance market, including life and general insurers. Our insurance strategy will focus on enhancing our support for clients through investment strategy, asset allocation and manager selection.”
Investment strategies for insurance companies are more conservative than those for other institutional investors, particularly for general insurers. In a time of record low interest rates, that has meant a search for better yield among other parts of the debt market, which tend to require a more sophisticated level of research, advice and portfolio construction.
