The combined market for third-party asset management in the US and Europe will grow by an average of...
The combined market for third-party asset management in the US and Europe will grow by an average of 10% per year over the next decade, research from reinsurer Swiss Re predicts.
Its study highlighted five factors, over and above current stock market turmoil, as drivers for an increase in outsourcing.
In particular, it points to mounting pressures on chief executives to deliver solid returns, maintain adequate diversification and manage operational risk. These factors, along with increased scrutiny from the rating agencies, will push many companies to specialist asset managers, it predicts.
Three other factors are the need for fund managers to follow an increasing number of sectors, the demand for specialist expertise in matching insurers' assets against their liabilities and the need to keep abreast of changing accounting rules and regulations.
At present, American insurers employ third-party managers to oversee $300bn of investments. This is a more mature market than Europe, where only $140bn is outsourced to a third party, although Swiss Re predicts it will grow faster than the US market. The reinsurer puts the amount of funds under third-party management in the UK at £20bn-£40bn.
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