APAC Insurers Struggle With Complex Asset Management Tools

Asia-Pacific (APAC) insurers are grappling with a profound “capability gap” as they pivot towards increasingly sophisticated investment strategies. According to a comprehensive study by Clearwater Analytics, confidence in existing technical infrastructure has plummeted, with only 23% of regional executives expressing faith in their systems’ ability to manage complex assets.

The research, which surveyed 150 senior executives overseeing a staggering $3.8 trillion (£3.0 trillion) in assets under management (AUM), paints a picture of an industry at a crossroads. As firms chase higher yields through private markets and third-party partnerships, their legacy systems are failing to keep pace with the resulting data fragmentation.

The Data Integration Crisis

Data integration emerged as the primary hurdle for the region’s insurers. A near-unanimous 149 out of 150 respondents admitted that receiving data from external managers in a multitude of conflicting formats has made accessing critical information a logistical nightmare.

Despite the high stakes, only 42% of firms believe their current systems are “excellent” at integrating these disparate data streams. This friction is exacerbated by the fact that 92% of executives now work with a larger pool of asset managers than in previous years, leading to a “spiderweb” of reporting lines and data silos.

Shifting Allocations and Rising Risks

The pressure on these systems is only set to intensify. The study reveals an aggressive shift in portfolio composition, as insurers look beyond traditional equities and bonds. Over the next three years, 88% of respondents intend to increase portfolio diversification. Specifically, allocations to private markets—often the most difficult to track and value—are projected to jump from 20% to 33% within just five years.

Key Investment and Operational Trends

Strategic Responses

Insurers are not remaining static in the face of these challenges. To bridge the gap, firms are adopting a multi-pronged approach:

Recruitment: Hiring specialised risk management experts to navigate “exotic” assets.

Technological Investment: Deploying new platforms capable of consolidating risk exposure across global trading desks.

Outsourcing: Moving back-office functions to external providers to mitigate operational strain.

Shane Akeroyd, Chief Strategy Officer and Asia-Pacific President at Clearwater Analytics, noted that with 72% of firms reporting higher risk profiles, those who modernise their data architecture early will likely emerge as the victors in an era of rapid industry consolidation.