Singapore's Keppel Insurance has appointed Deutsche Asset Management (DeAM) as sole investment manager for all of its insurance assets, including both assets accrued from its various insurance policies as well as nearly S$400 million in investment-linked policies.
"We do have other insurance companies feeding insurance-linked assets into our products, but this is a full book of business," says Choy Peng-wah, Asia CEO at DeAM. "There's a commitment at both firms to work together on new product launches. [Keppel Insurance] knows our track record and our global capabilities to introduce innovative products. This is a whole platform, not just the introduction of one product at a time."
Choy and Keppel officials declined to comment on what kind of new products would be introduced, but say the first ones could emerge within a month or two. Keppel Insurance already offers unit-linked Islamic, global equities, global fixed-income, balanced and sector funds.
The existing funds were previously managed by Keppel Investment Management, the asset management arm of Keppel TatLee Bank, which was acquired by rival bank OCBC last year, although a Keppel Insurance official also says the firm has used third-party fund managers for specific unit-linked products as well.
DeAM and Keppel declined to name the previous manager of Keppel Insurance's non-unit-linked insurance assets or quantify them. Keppel Insurance has 45,000 life insurance policyholders.
The acquisition of Keppel TatLee provided an opportunity for Keppel Insurance to team up with a global asset manager. "The escalation of public demand in the first half of 2001 for a broader selection of investment-linked funds to meet consumers' diverse needs has prompted Keppel Insurance to look beyond the scope of regional fund houses for a partner with a ready range of diverse funds," explains the Keppel official.
Choy says DeAM will work with Keppel Insurance's internal investment committee to gain an understanding of the insurer's clientele.
He would not comment on fee arrangements except to note that given the size of the relationship not only between DeAM and Keppel Insurance, but between Deutsche Bank and Keppel Group, DeAM is treats Keppel Insurance as a preferred client. "When it comes to compensation and remuneration we are aggressive," he says.
It is common among insurance companies in the region to have fund management affiliates manage all group assets, or outsource everything to a third party. Multi-manager approaches are rare, except for small, specialist mandates, as it entails an open architecture that is not found in Asia.