Episode 24: An Entirely New Risk Paradigm - Northern Trust Asset Management Presents The Risk Report

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley explores key findings from The Risk Report, a study analyzing more than 200 institutional portfolios representing over $200 billion in assets. The research uncovers surprising insights that challenge conventional investment wisdom, including why many portfolios contain twice as much uncompensated risk as compensated risk, how diversification strategies may unintentionally dilute returns, and the hidden risks that can cause unintended outcomes. With insurers facing a prolonged low-rate environment and increased volatility, these findings offer critical guidance for optimizing risk-adjusted performance.

We also discuss why traditional style investing often leads to index-like performance with higher fees, how over-diversification can erode alpha, and the importance of precision in portfolio construction. As insurers rethink their investment strategies, this conversation highlights the need for a data-driven approach to risk management and asset allocation. If you’re looking to enhance portfolio efficiency in today’s evolving market, this episode is a must-listen.