In a recent interview, Kazuhide Toda, head-Asia Pacific, Nippon Life Insurance, said one can create more synergy by entrusting some parts of the life insurance company’s assets to an asset management company. Should mutual funds do this? We ask the experts.
Saurabh Nanavati, CEO, Invesco Asset Management (India)
Yes, mutual funds should be allowed to manage insurance funds or assets in India, especially those of the unit-linked insurance plans, which have very similar mandates as (mutual) fund products. Globally, insurers tend to outsource fund management to asset management companies (AMCs), either completely or in specific areas, as AMCs are specialists in that area and have significant in-house research capabilities, and good, long-term track records (better than that of in-house fund management of insurance companies). Insurers then tend to manage only the risk element of those portfolios. Another business model is where the insurers have incubated their own asset management companies by first outsourcing their fund management to their own AMCs.
