As a growing number of insurance companies look to third-party asset managers to help them manage their investments amid challenging markets and evolving regulations, Franklin Templeton Investments is beefing up its business unit that caters to clients in this industry.
The firm has announced the establishment of a formal new business unit within its institutional asset management group – the global insurance asset management solutions business – to provide investment solutions to life, health, property and casualty and reinsurance companies.
Although Franklin Templeton has been providing these services to insurers for more than 20 years, a growing level of demand has prompted the firm to direct more resources to this part of the business.
“We’ve seen more demand from clients,” says Duane Green, senior vice president of Franklin Templeton Institutional – Canada, in Toronto. “That really led us to create a more focused approach to how we deal with this business, and formalize the group within our institutional business.”
Most insurers manage the bulk of their assets internally, however many are relying on third party asset management firms to augment these efforts.
“It’s been a much tougher market environment for insurers to manage these assets,” says Green, pointing to low interest rates and volatile equity markets. “I think that’s been the catalyst for them to go outside of their own organizations.”
As demand continues to grow, the insurance space represents a significant area of growth for the firm, Green adds.
“We see that this is going to be big part of our business going forward,” he says. “These strategic relationships with insurers are going to be a key part of our future growth.”
Costas Komodromos, based in Boston, has been appointed head of insurance general account business. He has 22 years of experience in the financial services industry, and has been with Franklin Templeton since 2007. Previously, Komodromos was responsible for business development within Franklin Templeton Investments’ asset management services. Prior to joining Franklin Templeton, he held senior positions with Putnam Investments and PricewaterhouseCoopers.
Michael Materasso, senior vice president and portfolio manager for Franklin Templeton’s fixed income group, has been appointed head of insurance investment solutions.
“We’ve taken a lot of our talent from within the organization, and re-focused it towards this initiative,” says Green.
In addition to the internal appointments, Mark Whitford joins as the group’s actuarial investment strategist. His experience includes more than 20 years of advising insurance clients on developing custom-built investment solutions. Previously, he was a director at Brookfield Investment Management, and vice president at Conning Asset Management.
Franklin Templeton has accumulated more than $64 billion in assets under management in the insurance industry, as of Oct. 31, 2013. The firm plans to continue to expand the insurance asset management team as it develops and enhances the investment solutions available to insurance clients.