Consultancy of the year: EY
In 2017, EY's focus was on developing deep analytics capabilities to support strategic investment decisions, improving financial reporting processes and understanding, and customer analytics.
In trying to support ALM and investment execution functions, the consultancy developed toolkits to allow users to perform "what-if" analysis. Its analytics and visualisation tools have helped clients to reduce the run-time on a matching adjustment (MA) portfolio from 11 days to 30 seconds.
The investment advisory team has worked with insurers to repack assets into MA-eligible securitisations. In particular, the firm has helped three insurers successfully apply the MA to equity release mortgage portfolios which, without restructuring, are ineligible for MA treatment.
Given the industry's growing appetite for the illiquidity premium under Solvency II, EY has played a role in developing opportunities for the market, including its work on restructuring, helping bring to market student loans, and helping to place investment in the largest offshore windfarm with insurance clients.
For many insurers, diversification of the asset book has become more important since the implementation of Solvency II, and EY has supported firms in moving into new asset classes, such as restructured insurance-linked securities, property, ground rents, direct lending, collateralised loan obligations, infrastructure debt, commercial real estate debt, agricultural loans and SME loans.
The investment advisory team has also assisted insurers in developing their strategic asset allocation frameworks to reflect their business objectives, constraints and risk appetite, and to identify opportunities for yield enhancement. As part of this, EY has assessed the make-up of insurers' investment functions and suggested organisational changes designed to optimise their approach to investment decisions.