Head of Corporate Division Asset Management
The approach to asset management taken by insurance companies has changed radically and permanently over the past 20 years. Persistently low interest rates have made it much more difficult to achieve guaranteed rates of return in life insurance. What’s more, the regulatory requirements have been tightened, with the Swiss Solvency Test (SST) and Solvency II demanding that sufficient capital is available to cover investment risks. As the asset management arm of an insurer, we have therefore learned to become more adept at generating high and stable returns with only a limited risk budget. Since 2001, Baloise’s asset management division has been a centre of competence within the Group, successfully managing not only insurance assets but also assets belonging to external clients. My team and I asked ourselves what asset management can do for our customers as part of the Simply Safe strategy. The answer was obvious: we will do more to offer our expertise in asset management to third-party investors such as pension funds. I firmly believe that our experience in safe, long-term, risk-adjusted investing will be an attractive proposition.
“I firmly believe that our experience in safe, long-term, risk-adjusted investments will be an attractive proposition.„
Several initiatives connected to this are now up and running. One of them is the expansion of our real estate department into a real estate fund manager. Baloise is one of the biggest property owners in Switzerland, with a portfolio of around 34,000 rental properties. This expertise in real estate management is now going to be made available to third-party investors. We will be launching a real estate fund that will be open to subscriptions from institutional investors, including the aforementioned pension funds. To help oversee the start-up phase, we have taken on more staff.
In other asset classes too, we are working on expanding the product portfolio. This spring, we launched a senior secured loans fund that is open both to our own insurance companies and to third-party investors. It very much follows the principle that we invest the assets of third-party clients in the same way that we invest our own assets. But our services in this area extend well beyond standard portfolio management. We are making full use of our expertise in solutions here and offering, for example, asset liability analyses in which the client benefits from our broad experience in managing insurance assets. Baloise is also making greater use of digital technologies in asset management. For example, Basler Germany has teamed up with Deutsche Asset Management to become the first insurer to launch a robo advisor, which provides automated asset management services under the Baloise Monviso brand.