For instance, equity-backed policies obviously require savvy in equity investing. Insurers are measuring their investments in different ways. More hands are minding the store. Oddly enough, investment officers report retaining a larger portion of the overall portfolio in house, even though they are hiring more outside help in specialized areas. The Goldman Sachs team believes that may be a function of mergers and acquisitions, since combined companies are creating larger asset bases with expanded capabilities.
High tech helps.
Every portfolio manager and company reports using specialized investment-tracking software and systems. Most firms own multiple systems, and many firms report owning multiple systems just for trading and portfolio management. Taking the long view, survey respondents expect weaker bond and stock markets, in fact weaker than were actually produced in the first half of 1998. Ekernas said those pessimists are on the right track, since insurers eventually must adjust to a harsher investment climate. That means that if you have long-term obligations today, have pension obligations that on average mature in 2012, unless you have matched those liabilities with similar duration assets, you have a huge reinvestment risk.