InsuranceAUM.com

Episode 193: Executive Spotlight: Bill Pieroni, President and CEO of ACORD

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley welcomes back Bill Pieroni, CEO of ACORD, for an engaging Executive Spotlight. Known for his high energy and deep insights into the insurance industry, Bill delves into a range of critical topics including ACORD’s global role in setting industry standards, the unique and extensive research studies conducted by ACORD, and the evolving landscape of insurance technology and M&A.

Bill shares insights from ACORD’s groundbreaking studies, such as the Global Insurance Stock Index and the characteristics of consistent value creators in the P&C sector. He also discusses the dynamics of mergers and acquisitions in the insurance industry, emphasizing the importance of strategic alignment and the pitfalls that can lead to value destruction.

The conversation covers the current state and future of InsurTech, highlighting the challenges and opportunities for insurance companies in keeping up with technological advancements. Bill’s perspectives are both thought-provoking and practical, offering valuable takeaways for insurance professionals and investors alike.

Episode 192: Filling the Gap: The Case for Non-Sponsored Direct Lending

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley sits down with Chris Rust, Co-Head of European Credit Opportunities at Ninety One, to explore the dynamic world of insurance asset management and private credit. With over 25 years of industry experience, Chris offers a deep dive into the European mid-market, specifically focusing on non-sponsored borrowers and asset-backed lending strategies.

Chris shares insights on why the European mid-market presents unique opportunities for insurers looking to diversify their portfolios, address a significant funding gap, and achieve attractive risk-adjusted returns. He also discusses the appeal of lending to sponsorless borrowers, how to successfully originate and structure these deals, and the importance of downside protection through asset-backed loans.

Listeners will gain a comprehensive understanding of the European private credit landscape, the potential benefits of adding this asset class to a global portfolio, and the keys to success in navigating this less crowded, yet highly lucrative, market.

Episode 191: What Insurers Need to Know about CECL – An Interview with SS&C’s Theresa Meawad

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley dives into the intricacies of CECL (Current Expected Credit Loss) with Theresa Meawad, Senior Director and Head of Solutions Consulting at SS&C EVOLV. Theresa explains the key aspects of CECL, a crucial accounting standard that impacts insurers' financial reporting, and how it differs fundamentally from previous models.

Theresa discusses the types of data insurers need to track to comply with CECL, the challenges they face during adoption, and the importance of selecting the right CECL model and provider. She also sheds light on how SS&C EVOLV helps insurers navigate the complexities of CECL with end-to-end solutions that seamlessly integrate with other SS&C platforms like Singularity and Precision LM.

Listeners will gain valuable insights into the evolving landscape of insurance accounting and how to manage the transition to CECL effectively.

Episode 190: Opportunities in private debt secondaries

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley explores the rapidly evolving world of private credit secondaries with John Bohill, Partner of Private Debt at the StepStone Group. John provides a detailed overview of the private credit secondaries market, explaining why it's generating so much buzz and why it's a crucial area for insurance companies to consider.

John discusses the supply and demand dynamics, the sources of volume, and the key considerations for CIOs interested in private credit secondaries. He also touches on the importance of looking at credit and collateral rather than focusing solely on whether an asset was acquired in the primary or secondary market. The conversation highlights how private credit secondaries can offer tactical flexibility and enhance portfolio liquidity, making them a valuable tool in today’s complex investment landscape.

Episode 189: Focusing on Real Estate’s Future with Pearlmark’s Steve Quazzo and Doug Lyons

In this episode of the InsuranceAUM.com podcast, Stewart Foley, CFA, sits down with Doug Lyons and Steve Quazzo, two Chicago-based experts in commercial real estate (CRE) from Pearlmark. Doug, Managing Principal responsible for capital markets and debt investment activities, and Steve, Co-Founder and CEO, share their extensive experience in the real estate sector, including their time working with the legendary Sam Zell. The conversation delves into the challenges and opportunities in today's CRE market, particularly focusing on the office sector's struggles, the impact of rising interest rates, and the broader implications for different real estate asset classes.

Doug and Steve also discuss their recent transaction with Conning, highlighting the natural fit between insurance companies and real estate investments. They provide valuable insights into how insurers can navigate the current CRE landscape, whether they're seeking stable current income or looking to be opportunistic in a market ripe with potential. This episode offers a deep dive into the strategic considerations for investing in CRE during these uncertain times.

Episode 188: Leading indicators: The next five years in direct lending

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley welcomes back Kevin Marchetti of Man Varagon for a deep dive into the evolving landscape of direct lending. With rising interest rates and an uncertain economic environment, Kevin provides valuable insights on how the next five years in direct lending are poised to differ significantly from the past decade. He discusses the critical importance of stress testing portfolios, especially in the context of increased borrowing costs for middle market companies. Kevin also highlights the need for insurance investors to focus on key performance indicators, such as interest coverage ratios and the presence of PIK (Payment-in-Kind) interest, to identify early signs of financial stress within portfolios. These indicators, Kevin argues, are essential in navigating the current market dynamics and ensuring robust credit selection.

Additionally, Kevin updates listeners on the recent acquisition of Varagon by Man Group and the strategic benefits this partnership brings. He explains how this merger enhances their origination capabilities and strengthens their ability to deliver flexible financing solutions, all while maintaining a disciplined credit selection process. With a focus on investing in recession-resilient sectors and maintaining strong relationships with private equity sponsors, Kevin outlines why Man Varagon is well-positioned to continue delivering consistent returns despite market challenges. This episode is a must-listen for insurance investors seeking to understand the intricacies of direct lending and how to effectively manage risk in a rapidly changing economic landscape.

Episode 187: Convertible Market Renaissance with IR+M’s Bill O’Neill

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley is joined by Bill O'Neill, Principal Senior Portfolio Manager at Income Research and Management, to explore the often underappreciated yet highly versatile world of convertible bonds. Bill shares his deep knowledge of the asset class, explaining the hybrid nature of convertible bonds that offer bond-like characteristics with the potential for equity-like returns. The conversation delves into the history and structure of convertible bonds, highlighting their unique appeal in today's higher interest rate environment. Bill discusses the resurgence of the investment-grade convertible bond market, driven by factors such as the need for diversified capital access, favorable changes in regulatory accounting standards, and the current economic climate.

The discussion also touches on the specific advantages convertible bonds offer to insurance companies, particularly the blend of downside protection and upside potential they provide. Bill details Income Research and Management's long-standing experience managing convertible bonds, emphasizing their focus on "bond-like" convertibles that align well with the conservative, income-oriented investment strategies often favored by insurers. This episode offers valuable insights for insurance asset managers looking to explore the potential of convertible bonds in a diversified portfolio, especially given the evolving financial landscape and the renewed growth in this asset class.

Episode 186: CLOs: a critical market to insurance investors

In this episode of the InsuranceAUM.com podcast, host Stewart Foley is joined by Kevin Farley, Managing Director and Structured Credit Portfolio Manager at Post Advisory Group, to dive deep into the world of collateralized loan obligations (CLOs). Kevin shares his insights on the evolution and scalability of the CLO market, particularly in the primary and secondary markets, highlighting how the landscape has changed post-Great Financial Crisis (GFC). The conversation explores the impact of regulatory changes, such as the rollback of the risk retention requirement under the Dodd-Frank Act, and how these have influenced market dynamics and investor behavior.

Kevin also sheds light on the resilience of CLO structures amidst potential economic stress, discussing the current state of defaults and the market's preparedness for an uptick in 2024. He touches on the growing interest in private credit, the differences between this and broadly syndicated loans, and the factors driving this shift. Wrapping up the discussion, Kevin shares his outlook for 2024 and the key takeaways for insurance investors considering CLOs as a part of their portfolio strategy.

Episode 185: Unlocking Forest Carbon Opportunities with Eric Cooperstrom

In this episode of the InsuranceAUM.com podcast, host Stewart Foley sits down with Eric Cooperstrom, Managing Director of Impact Investing in Natural Climate Solutions at Manulife Investment Management, to explore the intersection of timberland investments and impact investing. Eric shares his journey from traditional finance to leading Manulife’s forest climate strategy, offering listeners a unique perspective on how sustainable timber and agricultural investments can align with broader environmental goals. The discussion covers the growing importance of carbon markets, particularly the role of forest carbon in both compliance and voluntary markets, and how these markets are evolving in response to increasing global focus on climate change.

Eric also dives into the strategic approaches Manulife employs to balance timber and carbon value, emphasizing the importance of high-quality, high-integrity carbon credits. He explains how insurance companies can leverage these investments as both a portfolio diversifier and a climate hedge, potentially offsetting liabilities linked to climate risks. Whether you're familiar with timberland investments or new to the concept, this episode provides valuable insights into how natural climate solutions can contribute to sustainable, long-term investment strategies.

Episode 184: Impact of higher rates and increased volatility on insurance investors with Cindy Beaulieu, CIO of Conning’s North American Operations

In this episode of the InsuranceAUM.com podcast, host Stewart Foley speaks with Cindy Beaulieu, Chief Investment Officer of Conning's North American operations, about the impact of higher interest rates and increased market volatility on insurance investors. Cindy, a seasoned expert in insurance asset management, shares her insights on how the sudden shift to a high-inflation, high-yield environment has affected insurance portfolios and how Conning has helped clients navigate these changes. She emphasizes the importance of strategic asset allocation, diversification, and staying calm during periods of uncertainty.

Cindy also discusses how insurers are reacting to higher yields, including the potential for taking less risk while still achieving desirable returns. She highlights the continued importance of non-traditional asset classes like CLOs and esoteric ABS in diversified portfolios and explains how Conning’s holistic approach to insurance asset management, including their capabilities in structured securities, investment-grade corporates, and more, helps clients manage both risks and opportunities in a changing market.

The episode wraps up with Cindy’s thoughts on the outlook for 2024, where she foresees continued challenges but also opportunities in structured securities and investment-grade corporates. She also shares valuable advice about seizing opportunities in crises and her wish to have lunch with Warren Buffett, appreciating his long-term success and ability to adapt to market cycles.