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Commendable Performance By Insurance Asset Managers In 2008

Exeter, NH, June 9, 2009 - Investment firms specializing in the external management of insurance company assets performed commendably in 2008, including during the climactic final months of the year, according to preliminary data collected by Insurance Asset Manager (IAM).

The IAM survey findings show that its universe of 37 active insurer-specialist investment firms had $727.63 billion in non-affiliated general account* insurance company assets as of Dec. 31, 2008. After a year of financial crisis and plummeting values, this number was only 5% lower than the $765.66 billion these same firms reported as of Dec. 31, 2007.

Although IAM’s preliminary survey does not include all active managers in this specialist field (some, like AIG Investments, declined to participate), “the universe is easily large enough to show that insurance asset managers in 2008 gave a surprisingly good all-round performance in the prevailing circumstances,” according to Alex McCallum, IAM’s editor.

“Given the sharp value declines in all markets, the conclusion to be reached is that at the height of the crisis many external managers were beneficiaries of fresh supplies of assets from insurance companies opting for outsourcing solutions,” McCallum added.

Preliminary Survey Highlights

1. The top 10 managers, accounting for 85% of the outsourced general account insurance company funds, saw a decline in insurance assets of only 3%.
2. Six of the top 10 managers actually increased their assets: Standish (19%), PIMCO (13%), Goldman Sachs (10%), Conning (6%), SSgA (6 %), and GR-NEAM (4%).
3. Western led the losers in the top 10 with a decline of 25%. However, the biggest losers were in the 11 to 20 bracket: AllianceBernstein (-36%), Principal (-28%) and Columbia (-28%).
4. The two top-ranked firms, Deutsche Insurance Asset Management and BlackRock, held their #1 and #2 spots despite declines of 10% and 4% respectively. Conning’s increase kept it at #3.
5. Of the 37 firms in the survey, Parkway Advisors turned in the biggest percentage gain (29%) and Babson the biggest percentage loss (66%).

IAM Preliminary Rankings***

Top 10
Non-Affiliated General Account Insurance Assets
Dec. 31, 2008 vs. Dec. 31, 2007

1. Deutsche Insurance Asset Management
   $143.87 vs. $160.23 -10.21%
2. BlackRock
   $120.35 vs. $125.73 -4.28%
3. Conning
   $74.85 vs. $70.81 +5.70%
4. General Re-New England Asset Management, Inc.
   $62.65 vs. $60.20 + 4.08%
5. State Street Global Advisors (SSgA)
   $50.39 vs. $47.35 + 6.42%
6. Wellington Management Company, LLP
   $47.51 vs. $54.30 -12.50%
7. Goldman Sachs Asset Management
   $36.56 vs. $33.17 + 10.23%
8. Pacific Investment Management Company LLC (PIMCO)
   $30.17 vs. $26.74 + 12.82%
9. Western Asset Management
   $29.73 vs. $39.40 -24.54%
10. Standish Mellon Asset Management Company LLC
    $19.65 vs. $16.46 + 19.36%

Top 10 Total
$615.73 vs. $634.39 -2.94%

Universe Total
$727.63 billion vs. $765.66 billion

Additional Rankings

Additional preliminary information obtained from the survey includes the overall numbers for three more ranking categories, as follows:

1. Non-Affiliated General Account + Subadvised Insurance Assets**
   $991.47 billion vs. $1,123.38 billion, down 12%
2. Affiliated Insurance Assets
   $653.65 billion vs. $687.26 billion, down 5%
3. Non-Affiliated General Account Non-US Insurance Assets
   $266.61 billion vs. $291.21 billion, down 8%
   

Upcoming Comprehensive IAM Survey (2009 Edition)

The preliminary Insurance Asset Manager Survey, summarized here, will be followed in mid-summer by IAM’s comprehensive annual survey that will include a full menu of data, such as: asset allocation charts (individual and industry-wide), client numbers, mandate types, mandate sizes, active-passive ratios and other valuable information. The study will be titled Insurance Asset Manager Annual Survey 2009 Edition. An annual subscription to IAM surveys costs $600.00.

Insurance Asset Manager

Insurance Asset Manager (IAM) is a news and information service that covers the investment management side of the insurance industry for insurers and their third-party providers -- including asset management firms, investment consultants, custodians, legal advisors and other intermediaries. The IAM service includes the InsuranceAssetManager.com website, a twice-weekly e-mail service of headline news, a twice-monthly online newsletter, a printed newsletter, and the IAM surveys.

Notes

* General Account Assets. An insurance company’s overall investment account that contains the assets that back the cash value accumulations of policyholders and surplus. Excludes assets dedicated to “separate account” insurance products.
** Subadvised Assets. An insurance company’s separate account insurance product portfolios managed by third-party asset management firms.
*** IAM PreliminaryRankings. See attached for all four category rankings in the IAM preliminary 2009 annual survey.

Press Contact:

Alex McCallum, Editor
Insurance Asset Manager
alex@insuranceassetmanager.com
(603) 778-8179

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