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What is Insurance Asset Management?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 07 September 2016
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Insurance asset management is the process of overseeing the selection and maintenance of different insurance assets so that there is a steady generation of revenue that keeps the insurance company financial stable and capable of honoring its commitments to its customers. There are a number of factors that go into this type of management process, with some of them focused on making proper use of the funds collected as premiums to manage the day to day operation of the company. At the same time, insurance asset management also includes the task of investing in different types of stocks, bonds, and other opportunities so that resources are always on hand to settle claims without placing the company into dire financial straits.

One of the most basic tools used in insurance asset management is asset allocation. This simply means arranging the use of assets so that the company operates with the highest degree of efficiency. By allocating collected revenue so that the basic operations of the business are addressed even as funds are invested to ensure continued generation of revenue, the insurance company constantly builds resources that can be used to protect customers in the event of an emergency situation.

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Along with asset allocation, the issue of portfolio management is also key to the larger process of insurance asset management. Here, the focus is on monitoring the insurance assets so that the portfolio is generating the highest degree of returns possible in the current economy. This is often managed with the use of asset tracking software, since the company is likely to own a wide range of investments, including real estate as well as futures contracts, stocks, and other types of assets. Asset management software also makes the task of projecting possible returns that would result from making some changes in the structure of the company’s holdings, enhancing the ability to avoid less lucrative moves and focus more on asset management strategies that result in greater returns.

With insurance asset management, the idea is to select the right financial assets to keep the business strong even if a declining economy. When successful, the management process will not only allow the business to maintain its current revenue level, but slowly increase so that it is capable of offering a wider range of insurance products to consumers and generating even greater income levels. Ineffectual insurance asset management can lead to generating significantly reduced returns and over time may even lead to the failure of the insurer altogether.

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