Insurers
Calibrating Risk for Insurance Balance Sheets
Insurers today face a difficult balancing act: generating sufficient returns to meet policyholder obligations while navigating strict capital regulations and market volatility. SCGX Capital moves beyond standard off-the-shelf products to engineer bespoke global portfolios that align with specific balance sheet needs. We understand that risk must be carefully calibrated against liabilities. Our investment team works closely with insurance investment committees to design liquid, high-conviction strategies that aim to enhance surplus capital without breaching risk appetite or regulatory constraints.
Low Volatility Strategies for Capital Preservation
Traditional indices often carry volatility levels that are unpalatable for insurance balance sheets, leading to high capital charges. Our conservative strategy utilizes advanced quantitative screening to identify high-quality global opportunities with historically lower beta and stable earnings profiles. By filtering out speculative growth opportunities and highly leveraged opportunities, we construct portfolios that participate in market upswings while offering significant downside protection. This approach allows insurers to maintain essential exposure to global growth whilemitigating the impact on solvency ratios during market downturns.
Reliable Income from Quality Dividends
With fixed income yields remaining unpredictable, insurers are increasingly turning to global opportunities for income generation. SCGX Capital’s quality income solution focuses on opportunities with robust cash flows and sustainable dividend payout ratios. We look beyond high headline yields, which often signal distress, to find opportunities with the financial health to grow distributions over time. This strategy provides a reliable stream of cash flow to help match liability outflows, effectively acting as a powerful diversifier to traditional credit and bond portfolios.
Optimizing for Solvency and Capital Efficiency
Regulatory frameworks like Solvency II and local capital standards place a heavy cost on holding equity risk. We specialize in optimizing global portfolios to be as capital-efficient as possible. By utilizing smart beta factors and controlling specific risk exposures, we can target enhanced returns while managing the solvency capital requirement implications. Our investment team works in tandem with actuaries to model how equity allocations impact capital position, ensuring that every unit of risk taken is fully justified.
Decarbonizing Portfolios via Transition Leaders
Insurers are on the front lines of climate change, underwriting the very physical risks that threaten the global economy. The investment portfolio should not exacerbate these risks. SCGX Capital integrates forward-looking climate analytics into our selection process, identifying opportunities that are credible transition leaders. We build Paris-aligned equity portfolios that reduce carbon intensity without sacrificing diversification. This enables insurers to meet stakeholder demands for Net Zero progress while avoiding ‘stranded assets’ in the energy and materials sectors that could impair capital.
Capturing Structural Growth for Long-Tail Liabilities
While liability matching is defensive, insurers also need growth assets to cover long-tail risks and inflation. Our thematic solutions look past short-term market noise to identify structural trends shaping the future, such as demographic shifts, digitalization, and healthcare innovation. We believe that companies solving the world’s biggest challenges will generate superior earnings growth over the long term. By allocating a portion of surplus capital to these high-conviction themes, insurers can capture significant upside potential that traditional broad-market indices often fail to provide.
Advanced Portfolio Construction and Transparent Reporting
The complexity of an insurance balance sheet requires more than just one opportunity; it demands rigorous portfolio construction. We employ advanced optimization tools to ensure global opportunity allocation complements existing fixed income holdings. We analyze correlations across asset classes to minimize total portfolio volatility. Furthermore, we provide deep-dive transparency reports that allow insurers to see through to the underlying holdings, facilitating effortless regulatory reporting. We ensure the final portfolio is engineered to meet precise return and reporting objectives.