The short answer
An insurance company with less than about $750 million of invested assets can get investment advice from five sources: the asset manager that already runs its portfolio, a discretionary outsourced chief investment officer (OCIO), a national investment consulting firm, an independent adviser that specializes in insurance, or an investment officer on its own payroll. In practice the choice usually comes down to relying on the asset manager alone or adding an independent adviser who oversees the manager for a fixed fee.
Why so many small insurers face this decision
Outsourcing is the norm at this size. The NAIC's Capital Markets Bureau counted 2,415 U.S. insurers that used unaffiliated investment managers at year-end 2024, which is 53% of all companies that filed annual statements, and about two-thirds of them held under $250 million in assets. A company that small rarely has an investment professional on staff. The CFO or treasurer hires a manager, reviews a quarterly report, and answers to a finance committee responsible for a portfolio most of its members were never trained to evaluate.
The manager is usually competent. The gap is on the insurer's side of the table. Nobody's job is to ask whether the mandate is priced fairly, whether the duration fits the reserves, how much cash the company really needs, or what the rating agency will make of the allocation.
The five options compared
| Option | Who makes the decisions | How it is paid | Usually fits | What to check |
|---|---|---|---|---|
| Your asset manager | The manager, inside your guidelines | Management fee on assets | A simple, high-quality bond portfolio with an engaged CFO | Advice about its own fee, benchmark, and performance is not independent |
| Discretionary outsourced CIO | The OCIO | Percentage of assets, plus underlying fund fees | No investment staff, and a wish for one accountable firm | All-in cost, use of the OCIO's own funds, and who reviews the OCIO |
| National consulting firm | Your board, on the consultant's advice | Annual retainer | Larger or more complex investment programs | Who would cover an account your size, and the minimum fee |
| Independent insurance-focused adviser | Your board, on the adviser's advice | Fixed retainer or project fee | Small and mid-size insurers that already have managers | Depth and continuity, and no revenue from managers |
| In-house investment officer | Your own employee | Salary, benefits, data, and systems | Portfolios large enough to need daily attention | Cost and key-person risk |
How each one works in practice
1. Your asset manager
Most small insurers start here, and for a plain, high-quality bond portfolio it can be enough. The manager knows the holdings and will usually help with the investment policy and board reporting at no extra charge. The limit is structural. A manager cannot give independent advice about its own fee, its own benchmark, its own performance, or whether part of the portfolio belongs with someone else.
2. A discretionary outsourced CIO
An OCIO takes over the investment function. It sets the allocation within your policy, selects the managers or funds, and executes. This suits an insurer that wants one accountable firm and has no staff to oversee several. It is usually the most expensive outside option, because the fee is a percentage of assets and underlying fund fees come on top, and the board still needs someone independent to evaluate the OCIO itself. More on OCIO for insurance companies.
3. A national investment consulting firm
The large consulting firms advise without taking discretion, which keeps the board in control. They are built mainly for large institutions. Clearwater Analytics' 2026 insurance outsourcing report counted $1.8 trillion of insurance assets under advisement across the twelve consultants it surveyed. A carrier with $150 million should ask who would actually cover the account, how many insurance clients of its size the firm has, and what the minimum fee is.
4. An independent, insurance-focused adviser
An independent adviser also works without discretion, usually for a fixed retainer or project fee, and alongside the managers the insurer already has. The work is oversight: the investment policy, manager evaluation, peer benchmarking, fee review, asset-liability questions, and reporting the board can act on. The thing to check is depth. Ask who does the work and what happens if that person is unavailable, and confirm in writing that the adviser takes no compensation from managers or product sponsors. How a fractional CIO arrangement works.
5. An in-house investment officer
Hiring makes sense once the portfolio is large or complex enough to need daily attention. Below that point the cost of a qualified person, plus data and systems, is hard to justify, and a one-person department leaves the company exposed if that person leaves.
Questions to ask any adviser
- Who has discretion over the portfolio, in writing?
- How are you paid, and do you or any affiliate receive anything from the managers, funds, or custodians you recommend?
- How many insurance general accounts do you advise, and of what size? Statutory accounting, risk-based capital, and rating-agency capital models are specific to insurers.
- Who will attend our finance committee meetings, and will it be the same person next year?
- What will the board receive each quarter, and can we see a sample?
Where General Account Advisors fits
General Account Advisors is the fourth option: an independent, fee-only adviser to insurance companies, public-entity risk pools, and captives with $50 million to $750 million of invested assets, based in Edmond, Oklahoma. The firm does not manage assets. It was founded by Jonathan L. Wilcox, CFA, who spent eight years as chief investment officer of a $1.8 billion insurance general account.
A way to test the question. Our complimentary Schedule D diagnostic compares your portfolio with similarly sized carriers, using the statutory statement you already file. It shows whether there is anything an adviser would change before you decide to hire one.