A Look Inside Captive Insurance Companies' Investment Portfolios

Marsh Captive Solutions' 2016 Captive Benchmarking Report, analyzed 1,139 captive insurance companies (managed by Marsh globally) for benchmarking analysis. With the title, "Captive Solutions: Creating Security in an Uncertain World," the 44-page report covers many topics from reasons to form a captive, roles captives can play, and the changing regulatory landscape. In this post, I will summarize Marsh's findings in the area of investments for captive insurance companies.

Runnymede Wins Top Customer Care in Investment Management for Fourth Year

Captive Review Magazine Unveils Industry Awards

Runnymede Receives Top US Captive Services Award For "Innovation in Investment Management"

Morristown, New Jersey -- Runnymede Capital Management has been named winner of "Innovation in Investment Management" at the 2015 US Captive Services Awards. Runnymede is the only firm to have won a captive services award for four consecutive years having been previously named "Best Client Care in Investment Management" in 2012, 2013, and 2014. This is the first year that Runnymede has won "Innovation in Investment Management." 

The US Captive Services Awards recognize service providers to captive insurance companies who have outperformed their competitors and demonstrated the highest levels of excellence over the past 12 months. The awards took place in Burlington, Vermont on the eve of the Vermont Captive Insurance Association’s (VCIA) annual conference – the largest captive insurance gathering in the United States. This year's awards drew a record number of firms submitted for nomination and included seventy four firms vying for top honors.

Runnymede Named "Best Customer Care in Investment Management" at US Captive Services Awards

Runnymede wins customer service award for third consecutive year

Morristown, New Jersey, October 9, 2014 – Runnymede Capital Management has been named “Best Customer Care in Investment Management” for the third consecutive year at the annual US Captive Services Awards held in Chicago. The program is presented by Captive Review with the goal of recognizing and rewarding service providers to captive insurance companies who have outperformed their competitors and demonstrated the highest levels of excellence over the past 12 months. A captive is an insurance company owned by one or more non-insurance companies to insure risk, essentially a form of self-insurance. Notably, Runnymede is the only firm that has received the same award each year since inception of the awards program three years ago.

A Look Inside Captive Insurance Companies' Investment Portfolios (2014)

Marsh recently published its 2014 Captive Benchmarking Report, analyzing 1,148 captive insurance companies (managed by Marsh globally) for benchmarking analysis. Since the credit crisis, captives that have a parent company have invested approximately one third of investments toward loans to their parent company or other intercompany investment. Prior to 2008, many more captives were invested in equities. The motivation behind intercompany investments with the parent entity or affiliates is to minimize the cost of capital employed in the captive and enhance the parent company's liquidity. Reinjection of resources to the operations of the parent company is also a side effect of the current low interest rate environment. Further, the parent company has greater control over the captive’s invested assets.

Captive Review Q&A: Runnymede Capital, Best Customer Service in Investment Management

Captive Review's Stephanie Tassone recently sat down with Andrew Wang, Senior Vice President at Runnymede. For two consecutive years, Runnymede Capital Management has been named the winner of Customer Service in Investment Management at the U.S. Captive Service Awards.

Judges’ comments: Taking out this award for the second year running, Runnymede is focused and committed to provide investment management services to its captives. The firm has established a reputation as providing knowledgeable and responsive customer service.

Do Higher Yields Mean Higher Risks For Captive Insurance Investment Portfolios?

Captive Investing Today

Since the financial crisis began in 2007, the Federal Reserve has taken extraordinary actions including reducing the level of short-term interest rates to near zero and pushing long rates to historic lows. This has impacted captive insurance portfolios that strive to safely generate enough investment income to cover operating costs, maintain statutory reserves, and pay claims when needed. With new Fed chief Janet Yellen taking charge soon, most participants believe the key themes for 2014 will be timing of the Fed taper and how financial markets will react.

Equity Management More Important Than Ever Before

In the years 2010-2012, investors around the world poured nearly $700 billion into bond funds, while taking nearly $300 billion out of stock funds. That was then, this is now. Today, more investors view the bond market as abnormally risky and are concerned that recent bond losses could deepen if interest rates continue to rise. ZIRP (zero interest rate policy) has come at the expense of savers and conservative investors, among them are retirees and captive insurance companies. Without an ability to find a risk-free return, much less a low-risk return, many investors have moved and continue to move into riskier assets in order to generate some returns.

Runnymede Capital Management Named "Best Customer Service in Investment Management" at 2013 Captive Services Awards

Morristown, New Jersey, December 3, 2013 – Runnymede Capital Management has been named “Best Customer Service in Investment Management” for the second consecutive year at the US Captive Services Awards. The program is presented by Captive Review with the goal of recognizing service providers who have excelled over the past 12 months. Notably, Runnymede is only one of three firms that received the same award as last year, reflecting the changing landscape of the U.S. captive insurance industry.

Asset Protection 101: Diversification strategy gone wrong

The consensus among most financial professionals is that asset allocation is one of the most important decisions that investors make. However many people mistake asset allocation for diversification. This is the definition from the SEC:

The Magic of Diversification. The practice of spreading money among different investments to reduce risk is known as diversification. By picking the right group of investments, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede Capital Management, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Runnymede Capital Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.