Singapore Insurers Navigate Outsourcing and Data Challenges

Insurers in Singapore are increasingly relying on external asset managers to enhance portfolio oversight and reporting, but this shift is adding pressure on data management and integration, according to a recent study by Clearwater Analytics Holdings, Inc.. The research highlights the delicate balance insurers must strike between leveraging external expertise and maintaining control over their growing volumes of investment data.

The study surveyed insurers managing a combined total of approximately $1.04 trillion in assets. Findings revealed that, on average, 34% of portfolios are managed externally, with individual firms outsourcing between 24% and 45% of their investments. Notably, all respondents reported using third-party managers for at least a portion of their portfolios.

Looking ahead, the trend toward outsourcing appears set to accelerate. About 63% of insurers plan to increase their external mandates over the coming year, while only 26% expect to bring more assets back in-house. The primary motivations are improved portfolio control and enhanced transparency rather than cost reduction or internal capability gaps.

However, the growing reliance on third-party managers introduces significant data management challenges. Approximately 92% of respondents indicated that rising data volumes—often in varying formats—are becoming increasingly difficult to access and use effectively. Integration, coverage, and consolidation of these datasets emerged as the most pressing operational hurdles.

Stricter regulatory requirements further complicate the landscape. Insurers must now comply with more demanding standards related to stress testing, solvency reporting, and risk disclosure. This is prompting investment in upgraded asset-liability management systems and new technology platforms.

To address these pressures, more than half of respondents plan to expand their use of data analytics over the next 12 months, while 55% intend to implement artificial intelligence (AI) and machine learning tools to handle increasingly complex datasets. These technological solutions aim to transform raw data into actionable insights and improve risk monitoring.

Outsourcing also reflects broader shifts in portfolio strategy. About 84% of insurers expect to diversify further, with private market allocations projected to rise from 20% to 36% over the next five years. These alternative investments typically produce more complex and less standardised data, adding to operational demands.

In response, insurers are rethinking workforce composition and operational processes. Firms are hiring additional risk specialists, investing in digital tools, and reducing reliance on manual spreadsheet-based workflows, while continuing to outsource more routine functions.

Clearwater Analytics noted that insurers are becoming more comfortable with external managers, particularly for complex or alternative assets, as technological improvements enhance visibility. Nevertheless, managing fragmented data flows remains a critical challenge as outsourcing expands.

Singapore Insurers: Outsourcing and Data Overview

Overall, Singaporean insurers face a complex balancing act: leveraging external expertise to enhance portfolio management while ensuring robust control over increasingly voluminous and fragmented data sets. Technology adoption, process optimisation, and strategic workforce planning are emerging as critical levers for navigating this evolving landscape.

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