Episode 117: An Interview with Nicos Scordis: A Leading Academic’s Insights on Insurance Asset Management

In this insightful episode of the InsuranceAUM.com podcast, Stewart Foley welcomes Dr. Nicos Scordis, the John R. Cox Ace Limited Chair of Risk and Insurance at St. John's University, to explore the complexities of value creation in insurance asset management. Dr. Scordis, a highly respected academic, shares his unique insights into how insurers create value, diving into the nuanced roles of underwriting, investment strategy, and regulatory constraints in determining an insurer's financial success.

The conversation explores traditional views and challenges in insurance asset management, including how float operates as an investment tool, the option-like nature of insurance contracts, and the pivotal role of underwriting in creating competitive advantage. Dr. Scordis introduces a fresh perspective, emphasizing that investment policy should align closely with underwriting policy to ensure balanced value creation and avoid shifts between policyholder and shareholder benefits. The discussion also highlights investment constraints imposed by regulatory requirements, surplus management, and asset liability matching, illustrating the complexity of achieving portfolio efficiency within these boundaries.

Stewart and Dr. Scordis also tackle the ongoing debate between investing for yield versus total return, noting that regulatory guidelines and business goals often sway the choice. They conclude with an exploration of whether insurers can realistically aim to achieve durable alpha within the industry’s constraints.