For managing insurance investment portfolios, you want a holistic view of risk, performance, and capital charges. That requires a unified language among securities, ratings, and benchmarks.

Part of this challenge is unique to insurance. Unlike other investment managers, insurers invest assets back into liabilities for products such as whole life policies, indexed annuities, property and casualty reserves. These have their own regulatory capital requirements and duration constraints.

Centrally managed reference data and a consistent taxonomy are essential for end-to-end views of individual portfolios. For example, for one portfolio, actuaries need to see how assets tie to products. Finance needs legal entity and jurisdictional splits. Investment teams managing external money have to pull credit quality for RFPs.

If they all look at the same positions through different lenses, they’re missing a common denominator. Each additional managed portfolio (either for the general account or for unaffiliated insurers) compounds that problem. Analysis and data rollups become increasingly cumbersome.

The industry is well aware of its challenges. An Oliver Wyman survey found 45% of insurers struggling with data timeliness and 39% with ongoing management of asset-level data.ⁱCommon underlying reference data, i.e., the identifiers, classifications, and attributes that define a security for pricing, risk, and reporting, is a critical piece for solving that challenge.

The lack of a common denominator

The fundamental problem is the differences between market data providers.

For example, Intercontinental Exchange (ICE) maintains nearly 300 classifications across asset classes, with products in granular buckets based on deal structure. Instruments like Z-bonds, planned amortization classes (PACs), and interest- or principal-only strips are separate in ICE, but another provider may roll them into a single mortgage-backed security.

Ratings create a similar disconnect. One agency may rate a security A- while another rates it BBB+. S&P A- is comparable to Moody’s A3, although not identical. These differences feed into insurers’ capital requirements, because ratings determine risk-based capital (RBC) requirements and capital charges. They map to 20 distinct National Association of Insurance Commissioners (NAIC) designation categories on a scale of one to six. Even minor differences create large capital consequences that can squeeze opportunities.

An insurer with multiple market data providers across desks eventually discovers that “the same thing” isn’t really the same across systems. Even when the CUSIP matches, one feed tags a tranche as a PAC and another rolls it up under a broader category. The same thing happens with historical and current ratings. Two teams can hold the same security and still compute different prices, risks, and rollups because their local definitions of the instrument have drifted.