Insurance Company Consulting Services
Investment Solutions and Advisory Services Powered by Advanced Analytics
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 (expected growth vs. risk for surplus, net income, and risk-based-capital ratios)
Determines:
- Whether a portfolio is taking unintended systematic risks
- If performance exhibits statistical evidence of persistent skill
- How much active risk a manager is taking relative to its true passive alternative
Enterprise Risk Modeling |
Factor Risk Modeling |
Manager Selection & Oversight |
Reporting, Communications & Support |
|---|---|---|---|
| DFA/ALM analysis relative to peers and competitors | Equity and Fixed Income Factor Risk Models built to distinguish security selection risk and return from unintended passive market risks and timing | Qualitative assessments informed by factor risk models | Serving: investment committee and internal staff |
| Compare surplus, net income, and capital adequacy risk postures to those of peers. | Identify any unintended systematic risks | Red flag monitoring: • Closet indexing • Negative skill • Overcapitalization • Risk exposures conflicting with mandate • Unexplained changes in risk exposures |
• Performance review relative to peers • Attribution analysis • Board, committee, and staff education • Operational support |
| Consider the impact of changes in asset risk on relative risk positions | Identify persistent security selection skill | Fee negotiation relative to active risk | Rating agency support |
| Ensure sufficient active risk to compensate for fees |
Asset Allocation, which explains more than 90% of performance, is particularly complex for P&C and health insurers who must trade off asset risk against underwriting risk, asset and premium leverage, and dividend policy. For all its importance, often the decision-making process on asset allocation is inadequate, leading to sub optimal outcomes. Portfolio construction and manager selection decisions are too often informed by outdated analytics that are not predictive, and as a result may be misleading.
- DFA/ALM models should be transparent, easily vetted, available to clients with all assumptions challenged, tested and fully disclosed.
- ESG analysis includes modeling the impact of ESG constraints on equity portfolio risk to determine how they 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.
Clients Served
Property and Casualty Companies
Health Insurers
Captives
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.
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.
