Insurance asset manager of the year: Aviva Investors
Diversification has often been referred to as “the only free lunch” for insurers seeking to boost the profitability of their investment portfolios in a low-return environment.
Iain Forrester, head of insurance investment strategy at Aviva Investors, says the search for diversification has intensified in recent years, particularly in respect of alternative asset classes such as private debt.
“Our insurance heritage and long-standing track record in private debt means we understand this dynamic,” says Forrester.
Forrester’s comments are supported by a 2018 study from Aviva Investors, which found insurers and pension funds across Europe are planning to increase their allocations to alternative assets in the coming years.
Aviva Investors’ track record in private debt dates back to 1984 when it started to provide commercial and real estate finance.
Its private market capabilities have grown since then, and as at 30 June 2018, Aviva Investors managed £20bn ($26bn) across assets including infrastructure debt, private corporate debt and structured finance.
Across the world, insurers’ investment objectives increasingly include meeting specific environmental, social and governance (ESG) criteria.
ESG is a key issue for Aviva Investors too, and it is a founding signatory of the UN-backed Principles for Responsible Investment.
The asset management business integrates ESG considerations into its investment policy and process in liquid and illiquid assets, which is overseen by a team of corporate governance and responsible investment specialists.
Over the last year, Aviva Investors has doubled investments in green and social bonds to £744m, launched socially responsible investment funds and engaged with several thousand companies to encourage ESG best-practice.
The judges praised the extensive range and scale of services provided by Aviva Investors, as well as the analytics dashboard it has developed to provide clients with up-to-date information on their assets.
Forrester says: “The tool provides daily visibility of public fixed income portfolios, including a variety of financial, risk and Solvency II-based metrics.”