Insurance Consulting Services and Risk Models
Beacon Pointe is working with Peer Analytics to deliver what we believe will change the way insurance companies allocate assets, analyze portfolio performance, and select/evaluate portfolio managers.
How We are Different
Enterprise Risk Analysis Relative to Peers
Equity and Fixed Income Factor Risk Models
Allows insurance underwriters to:
- Evaluate surplus, net income, and capital adequacy risk positions
- Compare risk postures with those of peers
- Determine surplus/net income risk tolerance
- A portfolio is taking unintended systematic risks
- There is statistical evidence of security selection skill likely to persist
- A manager is taking sufficient security selection risk to compensate for active fees
Asset Liability Modeling: DFA/ALM
Factor Risk Models Built Specifically for Oversight
Manager Selection & Oversight
Actionable Performance Evaluation
|DFA/ALM analysis of client and individual peers and competitors||Equity and Fixed Income Factor Risk Models built to distinguish security selection risk and return from unintended passive market exposures and timing||Qualitative assessments informed by transformative Factor Risk Models built for oversight||Return Attribution to:
– Passive exposures
– Timing (changes in passive exposures)
– Security selection
|Compare surplus, net income, and capital adequacy risk postures with those of peers||Identify any unintended systematic risks||Identify statistically significant security selection skill likely to persist||Skill confidence levels (i.e., likelihood of future outperformance)|
|Evaluate the impact of changes in asset risk on relative risk positions||Portfolio Construction:
Mitigate unintentional passive risk
Maximize security selection risk
|Avoid managers taking too little security selection risk to overcome fees…even with top decile skill
Red flag monitoring:
|Security selection risk and share of relative variance|
|Provide insight into surplus loss tolerance||Ensure sufficient active risk to compensate for active fees||Fee negotiation relative to active risk||Performance attribution relative to peers and Rating Agency support|
Asset Allocation, by far the most important investment decision, rarely receives the attention it deserves. While robust DFA models are effective at quantifying the trade-off between expected and worst-case results, they do not address the critical question of how much short-term downside can be tolerated in pursuit of long-term growth.
- DFA/ALM models should be transparent, easily vetted, available to clients with all assumptions challenged, tested and fully disclosed.
- DFA peer risk modeling of individual peer companies adds valuable context to the critical question of how much short-term surplus loss is tolerable in pursuit of long-term gains.
- ESG analysis includes modeling the impact of ESG constraints on equity portfolio risk to determine how unintended risk exposures might be offset with passive vehicles or by adjusting the target equity allocation.
Let us show you. To experience the Beacon Pointe-Peer Analytics approach please allow us to demonstrate our models in a complimentary analysis of your equity portfolio or of your enterprise risk decisions relative to those of your peers.
Research and Insights
We are pleased to share results and insights from our continuing research into portfolio and risk analysis and management. To discuss how these issues may affect your insurance company’s investment portfolio, please contact us.
Property and Casualty Companies
Risk Retention Groups
Alternative Risk Entities
Our Team and Resources
The Beacon Pointe consulting team brings specialized skills and analytical tools to the aid of insurers to help solve for their most pressing investment decisions. Our distinctions include:
- Our strategic alliance with Peer Analytics provides industry leading dynamic financial analysis models, peer company focus, and equity and fixed income factor risk models built for oversight.
- A robust toolset delivers significant competitive advantages for insurance clients seeking to maximize net income and build surplus.
- Insurance underwriters investment consulting team – including Beacon Pointe Co-Founder, Partner Garth Flint, Managing Director Mike Breller, and Chief Investment Officer Michael Dow, CFA, CPA. Peer Analytics Co-Founder David Newsom and Risk Partner Greg Kapoustin, CFA – who serve as an extension of our client’s internal staff, providing analytical strength, education and reporting assistance along with enterprise-focused program execution.