Outsourcing Investment Activities:
Consultant vs. Manager Roles

While every insurance company’s investment program has unique objectives and needs, outsourcing certain investment activities through third-party firms can help improve the investment process in various key areas.

The most common outsourced investment services are: Investment Consulting and Investment Management

The roles of managers and consultants often get confused for one another. Below is a breakdown distinguishing the roles of these firms and how they supplement an insurer’s investment process.

Overview: Investment Consultant: Investment Manager:
Main Roles:
  • Provide independent, unbiased oversight over an insurer’s overall investment process.
  • Evaluate and monitor the client’s investment manager, including performance, fees and compliance.
  • Directly invest funds within an insurer’s portfolio towards specific asset classes, as approved by the client.
  • Complete ‘Schedule D’ investment accounting on behalf of the client (if offered).
Most Requested Services:
  • Asset Allocation Analysis
  • Investment Policy Review
  • Peer Analysis
  • Manager Search & Evaluation
  • Portfolio Monitoring
  • Performance Measurement
  • Portfolio Management
  • Asset/Liability Management
  • ‘Schedule D’ Accounting
  • Performance Attribution
  • SVO Filing
  • Sector Allocation Assistance
Key Considerations:
  • Independence: Any potential ties to an investment manager or vendor.
  • Experience: Understanding of the insurance industry.
  • Trust: Comfort level with the firm’s senior professionals.
  • Performance: Adjusted for risk and vs. peers.
  • Staff: Insurance expertise and client service structure.
  • Conflicts of Interest: Organizational ties or revenue sources that may affect decision-making.