Benchmarks have never paid claims. It has never answered to a board. It has never managed liquidity during a difficult cycle. Most importantly, it never has to explain why an investment strategy does not match the needs of the insurance company it supports.

Benchmarks are still useful reference points

Benchmarks still matter because they are useful reference points. However, they cannot be the whole conversation.

Investment portfolios support the business

An insurance company’s portfolio has a different job than a standard institutional portfolio. It must support claims-paying ability, surplus, liquidity, regulatory expectations, long-term financial strength, etc. What’s important is that an investment portfolio can look fine against an index and still be poorly matched to the insured’s business.

AQS Asset Management, LLC.

At AQS, we manage portfolios exclusively for insurance companies. That focus changes how we evaluate strategy, risk, income, liquidity, and fitness. The question is not only, “Did we beat the benchmark?”, but rather, “Is the portfolio doing what the insurance company needs it to do?” That is Success by Design.