Insurance asset managers in the Asia-Pacific (APAC) region are increasingly opting for external management of their funds, according to a recent study by Clearwater Analytics. The research, which surveyed asset managers in Hong Kong, Singapore, and Australia, found that 35% of funds are currently managed externally, with all firms delegating between 24% and 45% of their assets to third-party managers.
The study highlights a significant trend, with 67% of executives predicting a shift towards more external management over the next five years. Only 22% foresee an increase in in-house management, whilst 11% expect no change. This shift is primarily driven by the growing reputation and acceptance of external managers, alongside enhanced transparency and reporting capabilities.
Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, noted, “The use of third-party asset managers across APAC is set to accelerate as insurers become increasingly comfortable with the practice and seek specialised expertise for complex private market investments.”
The study also revealed that the traditional motivations for outsourcing, such as cost-cutting and lack of in-house expertise, are now less significant. Instead, the focus is on gaining greater control and visibility over investment portfolios, with technology and platforms playing a crucial role.
As private markets continue to expand, representing a third of allocations, the reliance on external expertise is expected to become a competitive advantage for insurers in the region.
