That's because companies such as Prudential Insurance Co. of America, Newark, N.J., and John Hancock Mutual Life Insurance Co., Boston, don't expect to remain mutuals for long. There is a lot more pressure on mutual companies these days to have the same rigorous financial controls of the stock companies. While the equities market surged and then stalled in recent months, the bond market has not been as generous. They are being rewarded for incurring more risk. Everyone is pushing the envelope a little bit.
Insurers are also increasingly likely to outsource at least part of the investment function.
For instance, Renaissance Fund Advisors, an investment company that specializes in investing in insurance companies, counts life insurance companies among its clients, partner Michael Frinquelli said. What's also changing is the type of person being hired to manage insurers' investments. Recruiters are looking for those with a finance and Wall Street background, rather than just insurance expertise. A growing share of actuaries are entering asset management, since the job requires an intimate knowledge of the product side as well as how to gauge investment performance. What's changing the nature of asset management the most is the changing nature of insurance products.