Health insurers tend to have very short liability profiles and structure their portfolios based on cash flow modeling vs. liability matching.
Companies that are profitable and have a stable to growing customer base can invest in fixed income securities with longer durations than their liabilities and may also benefit from duration tiering of these holdings that provides for the additional liquidity that companies may need to meet unexpected claims.
Some health insurers may also face the added dimension of taxes which will make municipal bonds an attractive candidate for inclusion in their portfolios.
SAA helps health insurers weigh all of the important business and investment factors as part of the development of a well planned investment process.
Review How We’ve Recently Helped Health Insurers:
- Achieve Superior Performance Subject to State Mandated Investment Guidelines
- Respond Appropriately to Market Changes via SAA’s Manager Evaluation
How SAA Works with Life Insurers
Most life insurers need to maximize the spread they receive on investments in relation to the crediting rate they offer to their customers. Asset/liability management thus becomes a key factor in the development of a life insurer’s investment program.
SAA helps life insurers structure their portfolios to generate the necessary spread while also remaining cognizant of portfolio quality and liquidity.