Aon has partnered with Goldman Sachs to establish a new investment service that will enable captive insurers to spot and access appropriate, high-quality and yield-enhancing investments.
This new service is said to bring together new components to address client needs and is developed to offer a one-stop shop for captives to manage their assets.
Under the tie-up, Aon provides individual strategic advice, fund research and execution services through its team of investment specialists and practitioners across the globe.
Goldman Sachs offers a specialised investment platform for these elements using its market-leading Liquidity Solutions Portal, Mosaic.
The companies plan to roll out the Aon service in Ireland intially, with plans to expand it across markets globally.
The key features of the service include tailored advice on the captives’ investment strategy, daccess to a range of Aon buy-rated funds, and Support from Aon in executing client-directed trades among others.
Aon’s Global Investment practice will offer the new service together with the company’s Captive & Insurance Management Group (ACIM).
ACIM is said to colloborate with captives with over $175bn of assets globally, while Aon’s Global Investment practice advises clients on over $3.5 trn of assets.
Their combined insight and expertise is expected to help them in advising captives on a spectrum of investment opportunities.
Aon Global Investment partner and Insurance Solutions head Tim Currell said: “We believe that there are some simple steps that captive insurers can take to improve their expected investment outcomes without increasing risk – and this new service gives them the means.”
“Since the global downturn in 2008, we have seen some captives favour a low-risk approach to asset management, with some holding a significant portion of their assets in cash deposits. Given the prolonged low global interest rates over recent years, this has resulted, for some, in low or negative returns with assets potentially losing value in real terms. This challenging dynamic has been accentuated during the Covid-19 crisis.”
Goldman Sachs Insurance and Liquidity Asset Management business global head Michael Siegel said: “We are excited to partner with Aon and to provide a new range of asset management products from an array of asset managers to Aon’s captive insurance client base.
“Market volatility has changed what firms invest in for cash management purposes and how firms invest. We look forward to working with Aon to bring technology solutions to the forefront of liquidity and other risk considerations.”
In July, Aon partnered with insurtech Skytek for a new hurricane tracking system, for (re)insurers.