Aladdin by Blackrock

From Albatross to Catalyst; Insurers can thrive when their tech unifies the investment management process

By Kunal Khara, Global Head of Financial Institutions and of Aladdin Products & Platform Services

Higher volatility, rising inflation, and regulation. Private markets, digital assets, future assets.

Income projection, capital planning, and strategic asset allocation.

ALM, cashflow, and balance sheet management.


For an industry built on liability containment and risk management—the current state of play is a veritable potpourri of challenges and opportunities, especially when it comes to risk tolerance and investment strategies. These considerations are vast and dynamic. Meanwhile, every insurance team member must now have a risk point of view. Across teams they also must speak the same risk language.

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Simply put, the job of investment management at insurance companies has gotten bigger.

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And on top of that, there are very real (and highly competitive) megatrends that are driving an overall appetite for true, meaningful business transformation for insurers.

For instance, wholesale asset allocation in the insurance industry is changing; both from a total return perspective and when it comes to an income/balance sheet view—not only leading to incredible churn, but a stronger need to view and manage the whole portfolio effectively. That translates to a growing urgency to seamlessly bring together public and private markets assets, so that insurers can participate in all things alternative.

Meanwhile, tech-enabled transformation is gaining momentum. And as new, high-octane participants enter the industry, there is an opportunity for differentiation and acceleration through stable (and innovative) technology. Riding shotgun to that momentum? Business model disruption. Insurers also now need to find more sources of investment income, create increased transparency between business partners, and attract capital in new ways.

But it will be imperative that this transformation stands on a solid tech foundation—one based on a common data language across teams and business lines. That means a hyper-connected IBOR/ABOR for a fortified (and unified) set of workflows, robust analytics, and the ability to accurately report out to both regulators and the Street. Think of it as an unlocking mechanism that helps insurers focus better on insurance-specific core competencies like asset-liability management.

Lastly, framing the future has now become a facet of ordinary business for insurers. From business model disruption to asset allocation and through to forecasting—investment management teams have never before had to cast a line two, five, and even ten years from now—to comply with regulatory requirements, prove postures, and anticipate outcomes. And whether they’re focused on doing so for credit risk or physical/transition risk via climate, robust analytics and modeling capabilities are a must-have across the board.

In our latest annual Global Insurance Report—aptly titled Adapt and Thrive (Insurers seek opportunity in the changing world)— 65% of respondents anticipate that technology and digital transformation will be a primary driver in the industry over the next two years. However, 59% said that the greatest challenge regarding their tech infrastructure was an operating model built on multiple systems. These systems, together, act as a burdensome albatross that hangs around the neck of innovation, differentiation, and overhead.

To go from albatross to catalyst, they’ll need a tech platform that unifies the full investment management process, helps decommission multiple, unwieldy systems—and goes beyond a collection of disparate tools or data feeds.

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