Case Studies: Insurer Investment Forum

The Case Studies presented an SAA’s Annual Insurer Investment Forum have been lauded for their clarity, applicability and usefulness by our insurer attendees. Below are case studies presented at previous conferences.

We hope these samples provide better insight into the type of issues addressed at the Forum, along with how attendees are able to collaborate with peers. We hope you can join us for this year’s Insurer Investment Forum XVIII, held March 2-23, 2018 at Disney’s Grand Floridian Resort & Spa.

While SAA hosts the “Investment Seminar for Gov’t Risk Pools” every other year, the next Investment Seminar will be part of this year’s agenda and will take place on the final day of the conference. The Seminar will include a Pool-specific case study sessions as well.

A Tale of Two Pools: Risk Asset Allocation*

The Board members from two governmental pools continue to grumble about low, single-digit fixed income returns. Yet, they also remain concerned about the implications should rates rise sharply and unexpectedly as the Fed’s tapering program ends, Europe slowly recovers, and geopolitical tensions ease.

Although more volatile, the Board members generally agreed that risk assets had a significantly better long term risk/reward profile.

Do you believe both Pool#1 and Pool #2 have an argument to increase the risk asset allocation? Why? Why not?

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Previously Presented at the Investment Seminar for Gov’t Risk Pools


Fossil Fuel Divestment

Joe Smith, Chief Investment Officer of Mountain Top Insurance Company (MTIC), received an email from Frank Turbine, CEO, referring to a Financial Times article about the growing Fossil Fuel divestment movement, the forecasted decline in earnings and the value of future reserves for major energy companies, and the potential impact on investment returns on these companies. Frank hinted this should be a discussion topic for the next Investment Committee.

How should MTIC proceed? Maintain, Reduce or Eliminate Exposure?

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The Board’s Decision: Keep or Replace the Investment Manager

Over the last few years, Belichick Mutual Insurance Company has gotten worse than benchmark investment performance from its external fixed income manager, which is also rumored to be conducting less than ethical behavior .

With all of this controversy, senior management is considering a change from its fixed income manager, which, despite these issues, has developed a strong and very responsive relationship with the company over the last ten years.

Does the Board agree that it is time to change its fixed income manager?

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