Aberdeen Standard Investments (ASI) wins insurance asset manager of the year for supporting insurers during the Covid-19 pandemic, its focus on environmental, social and governance (ESG) factors and adding further value for clients.

During the pandemic, ASI's actions have included identifying cliff-edge credits on an 'ASI hit-list' and communicating this to clients to enable them to consider the potential solvency impact in the event of downgrades.

A process to identify alternative allocation options has also been developed. Subsequently, over £500m of assets on the 'hit-list' were re-allocated, typically selling sterling credit and redeploying in US dollar exposures hedged back to sterling.

Such activity generated a credit quality uplift, at the same time as generating a yield uplift after hedging costs, and therefore a further solvency benefit through increased own funds.

The judges also commended ASI's clear focus on ESG. The asset manager says it has made significant advancements in integrating ESG into strategic asset allocation processes.

For example, ASI says its bespoke climate change scenarios are incorporated through probability weighting and now impact the management of £30bn of insurance assets.

The asset manager has designed a range of sustainable index products to achieve a return in line with the parent index, while also seeking to improve ESG scores by 10-20%; reducing carbon intensity by 50% and enhancing exposure to green revenues by 50%.

ASI also actively seeks to add further value for clients. For example, it has invested in building a derivatives platform suited to the hedging and risk management needs of insurers.

Looking ahead, Neo Mooki Watson, investment director, global insurance at ASI, says: "We expect interest rates to be lower for even longer, cementing the need for yield enhancement. We also expect insurers' ESG activities to accelerate."