Credit Suisse has added a new administration and trading service to its iCPPI hedging platform in a move to help insurance companies manage the risks in their protected insurance products more efficiently.
The new service, developed in collaboration with SunGard, will allow insurance companies to manage the risks for each individual insurance product account. The service will provide connectivity, transaction processing, investor administration and configurable product definition capabilities to monitor and manage the capital protection requirements of each individual investor.
Mounir Elarchi, co-head of the fund-linked products business at Credit Suisse in London, told SRP that the iCPPI platform is a hedging platform for protected investment products and offers individualised hedges for protected products linked to funds, but that it is open to other investment solutions. "The iCPPI platform has wider application beyond insurance products such as defined contribution pension schemes, fund platforms, private banks and asset managers," he said. "The main target market is protected insurance products linked to funds, but the platform is fully flexible and able to handle other instruments such as notes and certificates."
Elarchi also said that the iCPPI platform will help advisers to manage investor portfolios as the ability to customise protection for each investor will bring new flexibilities to financial advisers. "Protection supported by the iCPPI platform would allow financial advisers to set the minimum investment outcome, with a selection of maturities and fund investments to cater to the investor’s investment goal and risk tolerance," he added. "Products hedged with the iCPPI platform could also offer flexibility on an ongoing basis, which will allow the advisers to continue to provide advice after the initial investment. This will increase the ability of the adviser to continue to engage with investors following the initial investment, and to ensure the investment continues to fulfill their needs."
According to Credit Suisse, insurance companies are seeking flexible investment products which provide customers with a wide degree of investment choice, including for capital-protection of the investment, but are also looking for the most efficient way to manage the investment risks embedded in these instruments.
"As protected investment and income options become more prevalent, costly modifications are required for record keeping and trading systems to support them," said Bob Santella, president of SunGard's brokerage business. "SunGard's retirement income solution helps reduce the operational and technology challenges associated with the adoption of these products while offering flexibility, portability and fewer implementation barriers for record keepers that want to offer these products."