Get Acquainted with ProSight’s Chief Investment Officer in 5 Questions
As Chief Investment Officer at ProSight, Nico Santini oversees the company’s investment portfolio to align our business needs with our risk profile while growing investment income. Coming off the heels of his participation in the North American Insurance Assets Management Conference, we thought it was a good time to sit down with Nico to learn more about his investment strategies—as well as what it was like coming on board at the start of a pandemic.
1. What was it like starting a new position just as COVID hit?
It certainly wasn’t an ideal situation, but it showed me how responsive and adaptive our people are in handling adversity during a time of uncertainty. For instance, I started a few weeks after the pandemic hit. ProSight delivered five boxes to my home, and within two hours I was up and running. During those first couple of weeks, I worked with the IT, Finance, and Treasury groups to onboard, begin the investment process with our managers, and report on investment portfolio implications of COVID to senior management and the board. Even with everyone working remotely, communication was flawless and fluid—a true testament of a well-run company and the culture of performance at ProSight.
2. Do you have specific investment objectives for ProSight?
My main goals are to create strategic (long-term) and tactical (short-term) investment plans that incorporate our business needs in tandem with opportunities in the market; in essence, selecting investments that can provide us with a diversified portfolio and weather different economic scenarios while still driving investment income. I believe the combined impact of these plans will give us steady and rising income, which will ultimately help increase our book value per share and stock price.
It’s important to note that there is no single investment strategy that works for all insurance companies due to the unique nature of the business written, portfolio risk tolerances, and management preferences. In ProSight’s case, we’re continuing to maintain our income focus by expanding our third-party investment manager bench to incorporate new bond strategies. Doing this will help diversify our portfolio while giving us an income advantage in finding the best managers out there.
3. How has COVID affected your investment strategy?
The strategic vision for our investment portfolio hasn’t changed meaningfully because of COVID, but we have modified our tactical approach to be more adaptive to ongoing investment opportunities. Having a more refined tactical approach with managers will provide us with unique opportunities as I expect markets to be much more volatile in the short to intermediate term. In a low yield environment, capturing small, rolling opportunities will make a noticeable difference in supporting investment income and balancing out our portfolio’s risk profile.
“The economic and investment environment will be forever changing, so you need to adapt to these changes to develop solutions.”
4. Any specific challenges or takeaways in your first six months as CIO?
I certainly have more takeaways than challenges as the transition to ProSight has really been fluid. My most immediate takeaway would be that we’re all in this together—we’re in one boat and each of us has an oar. Making sure we all understand the business and obstacles we face is imperative in this environment. This holds true for the investment portfolio since our strategy is not a set it and forget it process; it needs to acclimate to the changing market conditions and business profile. Another takeaway is the importance of being adaptive and agile. These are strong qualities inherent at ProSight that will allow us to stay consistent to our long-term investment goals of delivering bottom-line profitability and shareholder wealth.
5. Any advice for other CIOs in the insurance sector?
Always think outside the box to create solutions. The economic and investment environment will be forever changing, so you need to adapt to these changes and develop solutions that are consistent within your organization’s risk tolerance.
In today’s economy, a good CIO needs to balance available investment opportunities with their company’s business needs. Nico Santini performs this pendulum act by keeping the focus on the niche businesses we insure, then creating an insurance investment strategy around that core. For more information about ProSight or to chat with Nico directly, please reach out to him here.