Clearwater Analytics Study Shows Insurer Investor Shift

Rhea-AI Summary

Clearwater Analytics (NYSE: CWAN) Releases 2023 Insurer Cash and Short-Term Investment Management Market Outlook Study, Highlighting the Impact of Technology Platforms on Liquidity Portfolios

Positive

• Insurers are adapting to economic uncertainty and focusing on short-term assets due to higher rates and an inverted yield curve.
• Technology platforms, like Clearwater's, are crucial in managing and optimizing liquidity portfolios, streamlining operational processes for insurers.
• Insurers are leveraging liquidity 'supermarket' platforms to efficiently manage and oversee their money market fund portfolios, integrating with powerful solutions like Clearwater's investment accounting and analytics platform.
• Despite the volatile environment, a significant percentage of insurers maintain a passive approach, primarily holding cash or custodial sweep vehicles.

Negative

• 52% of respondents consider the massive flows into short-term investments as a passing trend, assuming future normalization of yield curve and recession fears.
• Around 40% of insurers have adjusted their custody partners due to recent upheavals in the banking sector.

According to Study, Technology Platform Proves Pivotal in Managing and Optimizing Liquidity Portfolios

BOISE, Idaho, Nov. 14, 2023 /PRNewswire/ -- Clearwater Analytics (NYSE: CWAN), a leading provider of SaaS-based investment management, accounting, reporting, and analytics solutions, today announced its 2023 Insurer Cash and Short-Term Investment Management Market Outlook study. The survey conducted in September 2023 engaged over 120 insurers and represented $2 trillion in assets underlining the most substantial trends in insurer cash and short-term investment management.

"Today's economic uncertainty and complexities are leading insurers to rethink their investment strategy. The study marks an increased focus on short-term assets, driven by higher rates and an inverted yield curve," said Scott Erickson, Chief Revenue Officer at Clearwater Analytics. "The key takeaway is the integral role technology can play in managing and optimizing liquidity portfolios, and robust solutions like Clearwater's can streamline operational processes."

Key highlights from Clearwater's report include the following findings:

• With increasing rates, insurers are waving goodbye to the era where short-term holdings were a drag on investment income. The shaky economic outlook is propelling insurers to stash cash into high-quality short-term investments.
• Insurers are increasingly leveraging technology and liquidity "supermarket" platforms, enabling them to efficiently manage and oversee their money market fund portfolios. Integrations with powerful solutions like Clearwater's investment accounting and analytics platform further streamline the process.
• Despite the volatile environment, a surprising two-thirds of insurers maintain a "highly" or "moderately" passive approach, holding primarily cash or custodial sweep vehicles.
• The poll uncovered that 52% of respondents consider the massive flows into short-term investments as a passing trend, assuming future normalization of yield curve and recession fears.
• The impact of recent upheavals in the banking sector has led to around 40% of insurers adjusting their custody partners. However, a significant 43% report no change.
• Over 50% of insurers reported using Treasury Management Systems for treasury functions, with a strong desire for improved tools for cash management and bank account management.

Download the 2023 Insurer Cash and Short-Term Investment Management Market Outlook study for the full insights. Results from this and all Clearwater flash polls in our Resource Center can be found at clearwateranalytics.com/resources/.

About Clearwater Analytics

Clearwater Analytics (NYSE: CWAN), a global, industry-leading SaaS solution, automates the entire investment lifecycle. With a single instance, multi-tenant architecture, Clearwater offers award-winning investment portfolio planning, performance reporting, data aggregation, reconciliation, accounting, compliance, risk, and order management. Each day, leading insurers, asset managers, corporations, and governments use Clearwater's trusted data to drive efficient, scalable investing on more than $6.4 trillion in assets spanning traditional and alternative asset types. Additional information about Clearwater can be found at clearwateranalytics.com.

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SOURCE Clearwater Analytics

FAQ

What are the key highlights of Clearwater Analytics' 2023 Insurer Cash and Short-Term Investment Management Market Outlook study?

The study highlights insurers' focus on short-term assets due to higher rates and an inverted yield curve, the integral role of technology platforms in managing and optimizing liquidity portfolios, and the use of liquidity 'supermarket' platforms to efficiently manage money market fund portfolios.

How are insurers adapting to the current economic uncertainty?

Insurers are adapting by focusing on short-term assets and leveraging technology platforms to streamline operational processes.

What percentage of insurers maintain a passive approach to their investments?

A surprising two-thirds of insurers maintain a 'highly' or 'moderately' passive approach, primarily holding cash or custodial sweep vehicles.

How are insurers managing and overseeing their money market fund portfolios?

Insurers are increasingly leveraging liquidity 'supermarket' platforms and integrating with powerful solutions like Clearwater's investment accounting and analytics platform.

What percentage of insurers have adjusted their custody partners due to recent upheavals in the banking sector?

Around 40% of insurers have adjusted their custody partners, while a significant 43% report no change.