Conning’s financial modeling capabilities are used to develop and test alternative investment strategies that incorporate our clients’ underwriting, capital adequacy, and risk tolerance objectives. A series of efficient-frontier analyses are produced using scenarios generated by our modeling applications. These results provide:
- A risk/reward comparison of alternative investment portfolios
- Pro forma financial statements for each alternative portfolio
- Volatility analyses of business and market components underlying the risk/reward comparison
The resulting client-specific investment strategy provides an overarching framework for the asset portfolio, reflected in a set of strategic targets. This framework provides the basis for developing a customized benchmark and investment policy and guidelines. We also perform peer analysis that compares a company’s investment risk, financial performance and investment performance to a group of peers. This analysis creates a foundation for investment risk discussions.
Investment strategy
A successful strategy must:
- Support insurance operations
- Provide a reasonable risk profile
- Maximize enterprise value
- Meet corporate objectives
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Strategic targets
Key elements of the investment strategy include:
- Cash flow and liquidity
- Fixed-income maturity structure and duration
- Capacity for tax advantaged income
- Equity allocation
- High yield and convertible bond allocations
- Alternative assets
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For more information about Conning’s comprehensive investment services, please contact us.