Senior officials tell Raquel Pichardo-Allison pension services could easily be exported to suit insurers
Under pressure
Much of the pressure on insurers is around understanding what their liabilities are and what drives liabilities, much like the pension market. Legris said the firm’s asset liability and modelling tools can be used by insurance companies, along with tools that model various asset classes.
Currently, the firm’s client base consists predominantly of pension funds, but Legris expects growth within the insurance market going forward to outpace growth in the pension market. This is partly due to it starting from a lower base.
He declined to say what the firm’s growth target will be.
However, despite a growing emphasis on advising insurers, officials are not letting go of its stronghold among pensions.
One of the areas officials expect to grow is in the US defined benefit space, a nearly $3trn market, according to figures from the National Association of State Retirement Administrators and National Council on Teacher Retirement.
Aon Hewitt expects to fill the hole left by rival Mercer when it announced in October that it would exit the public sector DB consulting space. The firm’s departure provides Aon Hewitt “a fantastic opportunity” to grow in the public DB arena, Tunningley said.
He added: “EnnisKnupp are well known for the public funds world in the US. I’d expect us to go on being closely associated with the public funds market.”
The US public market is already saturated with consultants, but the firm’s global investment capabilities will help it grow on what EnnisKnupp started, though recruiting the right people could be a challenge, he said.
Worldview
Globally, the firm is taking a more hands-on approach to the work it does for pensions.
“The biggest area of opportunity for us is the general feel among organisations that they need their advisors to go beyond just advice and recommendation to practical advice and implementation, execution and delivery,” said Legris.
This could take the shape of putting in place a secretarial-type of person to help with trustees with a specific project, or taking on more of the administration responsibilities from a plan sponsor.
The outsourcing of pension administration is another area of growth for the firm, as the recession has caused companies to take a hard look at their cost structures. He said this has become increasingly apparent in the UK, Germany and the Netherlands, where regulations have made managing a pension scheme increasingly complex.
Legris said: “It’s overall companies availing themselves of expertise. But from our point of view, it’s required a change of approach from, ‘we’re limiting ourselves to analysis and advice,’ to ‘we understand what they need to accomplish after they’ve implemented it, and we’re going to help them along the value chain.’
It means our consultants have to think as their clients a lot more, and not just as the expert in a particular company. It’s required us to work more as a multidisciplinary team than we had done before.”
