Comp trajectory for investment management at insurance companies.
Anyone have an idea what compensation trajectory looks like in the insourced investment teams of large insurance companies?
Have gotten pitched some roles in some of these groups and turnover seems non-existent so curious what is keeping people in those seats especially in financial centers where there are other credit managers (HFs, CLOs, and traditional AM firms) adjacent. The idea of not having to deal with clients, or perhaps just one client seems extremely attractive.
Largely interested in non-IG grade credit teams / alts teams at both PE Backed and publicly traded firms in New York for non-mega cap insurers for example, Starr, Loewes / CNA, Security Benefit, Global Atlantic, etc.
If people have comp points for the larger ones as well, would be interested to hear there as well.
Bump interested
A buddy of mine interviewed for an Associate/Research Analyst-level at this type of firm for a non-IG role, was quoted $125-130k base with bonus bringing it to $150-165k all-in in a Tier 1 market. Not sure if this is I/L with what others have been quoted for this level and firm? I'd expect compensation will be on the lower side of market given the investment mandate isn't as lucrative, you aren't taking on as much risk, and you aren't managing external money. Offsetting this is the relatively better WLB and stability.
As for how it progresses, I'd imagine it generally tracks below market across the board, mostly due to lower bonuses. I'd imagine the salary is relatively I/L. Anecdotally from a colleague who started at an insurance fund they were told by a few Senior Analysts that is was mid 6 figures all-in, his guess was the top performer was ~600k. If I had to guess I'd think most are probably in the range of $400-450k all-in in a top market.
Appreciate the input! Damn a range of 150 - 450k is around 25- 40% lower than I was hoping all in but makes sense. Any idea what year this was (ie; a few years ago or 2021).
As a separate data point, I know someone who was pinged for Principal Insurance’s Private Credit team as an associate in 2020 in NYC and was quoted 220k last year but obviously a larger firm, more deal focused, and NYC.
That was earlier this year. Granted the shop (not listed by you) is pretty small so perhaps that plays into it.
A couple things that could play into that, 1) Doesn't Principal manage outside capital? Similar to like a AXA, PGIM, or Allianz where comp would be more I/L with street. 2) Private Credit tends to pay above what you'd make in Public (where that quote was from and what I am more familiar with), not sure if you are thinking of focusing one or the other. As far as I know insurers tend to have the highest yielding stuff on the Private side vs. Public side given the different regulatory requirements (someone correct me if I am wrong) as well as current status of both markets. A lot of places will seldom go below BB with their balance sheet capital, which reflects in the comp given the risk/return and "alpha generation" potential.
I could very well be underestimating where you could top out at as an Analyst, definitely more earnings potential if you are a PM at one of these places as I'd argue managing an insurance portfolio is more of a top-down undertaking vs. a credit picking one.
I'm generalizing here and it will be different across every firm but this really extends across the industry where the higher the risk of the seat the higher the comp potential, but on an expected value basis seats are more comparable. So on the highest risk end of the spectrum you probably have the MM shops where you could clear 7 figures in a year early on but you might only last 2 years in the seat. Insurance is probably near the lowest risk end of the spectrum where you are managing permanent capital (the company's insurance premiums rather than client assets) and you're not trying to shoot the lights out on performance vs a bench which makes it both tough to earn high payouts but also tough to get fired. So your 5 year burn out risk might be 90% at an MM but it might be 10% at an insurer, which you should factor into your comp expectations. The band of outcomes on comp is also much tighter in the insurance seat where you more or less know how much you'll clear every year. The final piece, again generalizing, is that you will most likely work 9-5 hours at an insurer (you can work as many hours as you want but you'll only really be expected to work 9-5). IMO, the insurance seat is ideal for two kinds of people: the early career analyst trying to break in and gain relevant experience but that lacks the pedigree to go directly to a brand name fund/ER bank (this was me, started at an insurer), and the late career analyst that has a family and wants WL balance. So your all in will be on the lower end for this specific industry, but still be better than 95% of the country with comparable hours and WLB. That's the way to think about it IMO.
Could not agree with this more.... have worked at a Fortune 500 LifCo for 4+ years in a HY research role and I could not have put it better myself. Has been a great way to break into the industry and now I have tons of inbounds from shops I had zero chance of getting an interview at pre-joining my current shop..... it actually is a very hard job to leave as your comp for the hours you work is incredibly good, you get very good work life balance, you get a ton of vacation, interesting work, etc.... I probably will leave at some point in the future but as mentioned above the attrition is very low given the solid pay and good WLB... also completely agree with the comment about who it fits best.... hungry young analysts who want to break into the industry and experienced analysts (10+ years of sell-side or HF/Large AM experience) looking for a better WLB but still decent comp.... our team is essentially split like 50/50 between these two types which makes for a good development dynamic as well as older analysts are happy to help and pass on stuff they have learned.
Dumb question- what's the calculus for an insurance co outsourcing its investing (e.g., to a Wellington) vs. keeping in-house? Is it directionally just the bigger you are, the more likely you are to vertically integrate?
Fees. Why pay high fees to an outsourced manager when you can bring it in house and lower the fees paid out. Due to this, there is more money to go back to the policy holders and share holders.
My firm runs some insurance money for privates strategies while they have their public IG, HY, and Equity strats covered by in-house teams. It feels like half their calculus is $$$ consistently at work, rather than parking for capital needs. I'd think that moving in-house, you can customize a little more to optimize that $$$ at work while staying safe on a regulatory basis.
There is an interesting presentation by Wafra on investment insourcing that you can find online (key search terms are: 2019, New Mexico Wafra, Insourcing). I'd think that scale plays alot into the calculus, but its also who your owners are, especially with PE funds moving into the space. I am definitely curious to see how successful these PE Funds that are buying insurance assets to self-manage will be in the long run.
Think of a hedge fund like a taxi - you want to get to your destination as fast as possible and collect the fare, maybe even a tip. But an insurer is like a bus - you just drive the route and get paid whether people are riding or not
If you are managing the general account, you can expect base to be in line with market and bonus to be maybe 50% lower to reflect the shorter hours
At the analyst level this is around 85k + 40k, and at the associate level maybe 120k + 60k. These are post-banking raises, so maybe a little higher than you've historically seen people quote.
If you work in security selection (especially if you manage external capital), you will work closer to 60 hrs a week and get paid pretty much in line with other LO/private credit/etc. research gigs
The beauty is that most companies have quite good internal mobility, so you have options as your priorities evolve
Great insights, everyone! Do you think working as an Investment Analyst at an Insurance Company will provide similar exit opps into larger asset management firms or will they be disadvantaged?
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