Insurance Company Consulting Services
Investment Solutions and Advisory Services Powered by Advanced Analytics
Beacon Pointe is working with Peer Analytics to deliver analytics and consulting services that 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
Helps to Reveal:
- Whether a portfolio is taking unintended systematic risks
- If performance exhibits statistical evidence of persistent skill
- Whether a manager is taking sufficient security selection risk to compensate for active fees
Asset Liability Modeling: DFA/ALM
Equity and Fixed Income Factor Risk Models
Asset Allocation |
Risk Management |
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 risks and timing | Qualitative assessments informed by transformative Factor Risk Models built for oversight | Return Attribution to: – Passive exposure – 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 | Probability of persistent skill |
| 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, 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.
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.
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.