Portfolio management key to tackling inflation: Generali

A good process around portfolio management, with the ability to adjust and adapt on an almost constant basis, is key for global players grappling with challenges such as inflation, Hayden Seach (pictured), chief insurance officer – global,  Generali Global Corporate & Commercial, told delegates attending Intelligent Insurer’s  Re/insurance Outlook Europe 2023, conference taking place in Zurich this week (June 19-20).

In a presentation entitled ‘How to thrive in a volatile world: an insurer perspective on macroeconomics and geopolitics’, he explained how Generali uses three clear steps as part of its portfolio management process: portfolio planning, portfolio execution and portfolio review.

The first of these revolves around setting targets around key metrics such as expected loss ratios. It effectively determines what the company is trying to achieve. The second revolves around implementation and making the plan a reality. The third involves ongoing tracking of performance and making adjustments as needed.

“We are able to identify any problems in the portfolio and will then rebalance if needed. We hold quarterly portfolio management meetings where we track KPIs,” he said. Active underwriting intervention represents a key tool in managing inflation across the portfolio, he added.

Commenting specifically on inflation, he noted that the company models its portfolio based on data it receives from a number of sources and maps it against its portfolio. Describing the process as Generali’s “secret sauce” he stressed that good data is key to anticipating how inflation may change and its impact on the portfolio.

He also spoke about the challenge of under insurance, which he described as a form of insurance gap as it increases the likelihood that claims have not been paid in full. He described how new technologies such as location services able to assess properties remotely are being used to assess the risk relevant characteristics of buildings quickly and accurately.

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