Insurer Investment Forum XXIII

Insurer Investment Forum March 29 - 30, 2023
Marana, AZ
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SWOT Analysis: Investment Policy
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A SWOT Analysis will identify internal strengths, weaknesses, external opportunities and threats to each component of your insurer or risk pool’s investment process.

The SWOT analysis acts as a road map for future changes to the investment process.

Conducting a SWOT Analysis for each segment of the Investment Process Value Chain can be the best way to develop a blueprint and prioritization of how and where to improve the investment process.

Below are common practices and areas of concern within an insurer or risk pool’s asset allocation:

Example: SWOT Analysis - Investment Policy

Strengths: Weaknesses:
  • Clearly states operational goals and objectives.
  • Details any applicable regulatory constraints.
  • Outlines and describes the roles and responsibilities of each party involved in the investment process.
  • Investment policy is consistently reviewed every year.
  • Performance reporting requirements do not include risk-adjusted metrics (i.e. Sharpe ratio).
  • Benchmarks related to certain asset classes are not identified.
  • Performance reporting does include any consistent stress testing procedures.
Opportunities: Threats:
  • Policy should be revised to reflect any changes developed after conducting an asset allocation analysis.
  • Include allocation targets, constraints and/or ranges for allowable asset classes missing from the current policy statement.
  • Changing market conditions require consistent reevaluation.
  • Monitor potential changes in regulation or business structure.
  • Policy lacks metrics needed for annual financial statements and/or audits.

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