Insurance Investment Management: Data Challenges & Strategies
January 27, 2026
Read Time: 5 minutes
Authors: Phillip Bodenstab
Operations & Growth
Inst'l Asset Managers
Authored By
Phillip Bodenstab
Phil joined Arcesium in 2024 after 16 years at FactSet Research Systems where he focused on specialty sales of investment portfolio performance, market sensitivity and risk analytics for insurers and asset managers. At Arcesium, Phil partners with sales teams on acquiring new clients as well as retaining and expanding existing client relationships through technical demonstrations of Arcesium's trade lifecycle management and domain-aware data platform solutions.
The insurance investment management sector is a robust corner of capital markets, managing trillions of dollars in assetsi across insurance companies, reinsurance firms, and extending to both affiliated and unaffiliated asset managers globally.
It is also a complex one — insurance investment managers must wrangle high volumes of data, especially in the context of new asset classes and diversified investments, making data management a significant feat. In addition, these firms are subject to stringent regulatory requirements, such as those set by the National Association of Insurance Commissioners (NAIC), individually by states or through ratings agencies, which compounds their challenges.
Insurance investment management firms operate under various models, each with distinct ownership structures. There are three primary options:
1.Integrated model. Insurance companies manage their investment portfolios internally, leveraging their expertise and control over investment decisions.
2.Outsourced model. Insurance companies outsource their investment management to external (unaffiliated) asset managers, focusing on core insurance operations.
3.Hybrid model. Insurance companies use a combination of internal (affiliated) and external (unaffiliated) management, balancing control and expertise.
There are many reasons why a firm may choose one model over another, but often it comes down to strategy and expertise. For example, an insurance company may want to take advantage of opportunities in direct lending but lack the in-house expertise or operational systems to do so, leading it to pursue a hybrid model that outsources only that piece.
Insurance investment managers across these models must manage and consolidate data from disparate systems and numerous sources, requiring comprehensive data management capabilities. This need is compounded by the growing complexity sweeping across the broader industry as public and private asset classes converge as well as the sector’s intricate compliance reporting needs. NAIC’s regulations, in particular, demand detailed records and regular reports from insurance companies.
Unique considerations for general account investment management
Insurance investment managers experience many of the same trends as other asset managers, yet they differ in important ways. First, insurance companies often have unique investment goals. They must balance liability matching, maximize book yield, assess credit risk, and keep a close eye on duration management while, as mentioned, deciding whether to manage assets internally, externally, or via a hybrid model. A global insurer may oversee a diverse investment portfolio that includes internally managed liquid assets such as treasuries, municipals, and corporates, alongside externally managed investments such as private credit, mortgage- and asset-backed securities, real estate, and direct lending.
Meanwhile, regulatory and statutory obligations span a wide range of reporting requirements, including NAIC Schedules A–E as well as annual rating agency surveys. Growth, including potential mergers and acquisitions,iii compounds these pressures by introducing risks in onboarding new systems and assets without disrupting operations. Compliance requirements extend across multiple jurisdictions, each with distinct governance and reporting standards.
Perhaps the most important nuance, though, is that insurers are not chasing alpha outright. They are looking for stable, risk-adjusted returns. This is an extremely complicated task in an industry that is quickly evolving in complexity as other players seek to maximize returns through new opportunities. As such, insurance investment managers are in a tricky spot — they must evolve with the industry while maintaining their safe and secure positions.
As the industry continues to advance, insurance firms will need to properly harness their data and optimize their investment strategies to adapt to changing market conditions, claims resulting from evolving liability product profiles, continued M&A activity, and changing demands from ownership structures, without changing their risk profile.
Key challenges in data management
“Of course it's hard. It's supposed to be hard. If it were easy, everybody would do it,” Tom Hanks famously said in A League of Their Own. Those words are famous because they are true — in baseball, and elsewhere, including data management. In tackling this conundrum, there are a few principal challenges insurance investment managers face:
Data aggregation. Managing and consolidating general account investment-related data across systems and sources is a significant challenge. For instance, an Arcesium client recently had to integrate data from approximately 20 different source systems, each with its own unique data structure and security requirements. Moreover, the increasing diversity of portfolios, across public and private asset classes, is creating greater complexity in the data itself. The same private credit deal, for example, can arrive from different managers under different names, maturities, or coupons, creating duplicate records and undermining reporting accuracy.
Complexity in legal entity structures. Insurance companies often have complex legal entity structures. A holding company may have a number of ownership interests, both outside of and inside of insurance, and those interests can vary from full to partial ownership as well as indirect control relationships. Moreover, these can be onshore or offshore entities, which adds to the complexity. NAIC’s Schedule Y requires insurance companies to disclose detailed information on their holding company and affiliate transactions, including “the identities of and interrelationships between the parent, all affiliated insurers and reporting entities; and other affiliates, identifying all insurers and reporting entities as such and listing the Federal Employer’s Identification Number for each.”iv
Regulatory reporting. Because of solvency risk, insurance companies are held to extremely high compliance standards. However, this landscape is only growing more complex, as regulators look to keep pace with increased opacity in capital markets broadly. The NAIC’s new principles-based bond definition (PBBD),v for example, fundamentally changes the way insurers approach risk-based capital (RBC) formulas. Meanwhile, in the UK, the Prudential Regulation Authority (PRA)’s new liquidity reporting requirementsvi will require insurers to execute a look-through approach to gain clearer visibility into underlying holdings information.
These challenges are creating a perfect storm for insurance investment managers — they’re struggling to collate and utilize data in an environment where data requirements are increasing rapidly in both volume and complexity.
Forward-looking strategies
Despite the challenges listed above, the future is not bleak. In fact, insurers are only set to become a bigger part of the asset management ecosystem. The imperative for these firms is to solve their foundational data problems, so they can continue to grow their portfolios successfully and benefit from new opportunities as the market evolves.
Here are two key requirements for success:
Centralize data management. Consolidating data from multiple sources into a single, accurate view is crucial. This requires installing a comprehensive solution for centralizing and reconciling the firm's investment data, including public and private asset classes, thereby limiting the need for manual data activities and the risk of errors. Portfolio reference data structures should support many-to-many portfolio hierarchies, which is particularly valuable for insurance companies managing general accounts. A critical part of this effort is ensuring that you’re designing solutions to scale with growth and adapt to evolving regulations.
Data access and interaction. Once you have a centralized view, the next step is to ensure the data is useful. A number of different technology choices can be used to report on a centralized body of data, from dashboards to copilots. The goal should be to enable multiple ways to use the information with ease. For example, imagine you could write a simple query to a centralized data catalog without the need to create elaborate reporting or bother technical counterparts.
In achieving these two objectives, insurers unlock a slew of benefits. These include an independent, holistic investment data model, providing a "single source of truth" for both private and public asset data, as well as a single view of investments across all managers, asset classes, and regions to better enable decisions. Firms will also benefit from accelerated reporting cycles, as manual reconciliation is reduced, and improved risk management capabilities, particularly in hedging, replication strategies, and valuation protocols, through high-quality, reconciled data.
Future outlook
Like other areas in our world, the insurance investment management industry is in a pattern of dynamic change, driven by technological advancements and heightened investor demands. Insurance companies must develop adaptive strategies to navigate this landscape. A cornerstone of those efforts will be addressing their data management challenges, as they look to centralize their activities into a single, modernized platform. Those who do this well stand to gain bountifully through enhanced operational efficiency, improved risk management, and stronger reporting capabilities.
Data Is the Lifeblood — Strategy Is the Missing Link
“Even though data has been the industry’s lifeblood since the first actuary was hired, the ability of many insurers to refine their most basic raw material and produce more impactful insights has likely been hindered by a lack of long-term strategic frameworks and the integration of systems to support them.” — Deloitte Insights
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