Powerhouse BlackRock Inc. continues to be the most popular third-party asset manager for investment portfolios of U.S. insurers, according to an S&P Global Market Intelligence analysis.
In total, 38 insurers included in this analysis marked BlackRock as their unaffiliated asset manager in their 2020 annual statements. The company was listed in the same role in 29 major insurance companies' filings for 2018. Market Intelligence did not publish these rankings for 2019.
The Goldman Sachs Group Inc. managed certain assets for 19 major U.S. insurers in 2020, making it the second-most preferred asset manager for the group. Chubb Ltd., Aflac Inc. and Voya Financial Inc. were among the insurers that gave some control of assets to Goldman.
JPMorgan Chase & Co. was picked by 17 insurers to handle certain assets, while Ares Management Corp. was chosen by 12 companies, placing the two asset managers in third and fourth place, respectively.
The trend of insurers outsourcing management of certain assets has been ongoing for some time, said Richard Sega, global chief investment strategist for investment management firm Conning.
"One of the biggest interests for it is the very low interest rate environment," Sega said in an interview, adding that most of insurers' margins and earnings come from investment income.
Partnerships between insurers and alternative asset managers also appear to be gaining steam, as evidenced by some recent major transactions and partnerships.
For example, American International Group Inc. announced in July that it will sell a 9.9% equity stake in its life and retirement business to Blackstone Inc. for $2.2 billion in cash and agreed to enter into a long-term strategic asset management relationship with the company.
Blackstone is set to manage an initial $50 billion of the life and retirement business's existing investment portfolio after the equity investment closes. The amount will increase to $92.5 billion over the next six years.
Some life companies have also joined with private equity firms to enhance investment returns, Piper Sandler analyst Paul Newsome wrote in a research note. Newsome likened the AIG and Blackstone deal to the agreements between Athene Holding Ltd. and Apollo Global Management Inc., and Blackstone and FGL Holdings.
