Singapore Insurers Struggle to Balance Outsourcing and Data

Insurers in Singapore are increasingly turning to external asset managers to enhance portfolio oversight and reporting, but this growing reliance is intensifying challenges around data management, integration, and control. A recent study by Clearwater Analytics Holdings, Inc. highlights the delicate balance insurers must strike between leveraging third-party expertise and maintaining authority over their expanding data volumes.

The research surveyed insurers collectively managing roughly $1.04 trillion in assets. On average, 34% of their portfolios are outsourced, with individual firms delegating between 24% and 45% of investments to external managers. All participants reported outsourcing at least part of their portfolios, reflecting a widespread trend in the Singaporean insurance sector.

Looking ahead, outsourcing appears set to accelerate. Approximately 63% of insurers plan to increase external mandates over the next year, compared with just 26% intending to bring more assets back in-house. The primary drivers for this shift are enhanced portfolio control and improved transparency, rather than cost savings or internal capability gaps.

However, this growing dependence on third-party managers introduces significant data challenges. Around 92% of respondents cited rising data volumes—often in inconsistent formats—as increasingly difficult to access and use effectively. Integration, data coverage, and consolidation emerged as the most pressing operational concerns.

The challenges are further compounded by stricter regulatory requirements. Insurers must now comply with more demanding standards for stress testing, solvency reporting, and risk disclosure, necessitating investment in upgraded asset-liability management systems and advanced technology platforms.

To address these pressures, more than half of insurers plan to expand the use of data analytics over the next 12 months, while 55% intend to adopt artificial intelligence (AI) and machine learning tools to process increasingly complex datasets. These technologies aim to convert large, fragmented data into actionable insights and improve risk monitoring capabilities.

Outsourcing also reflects broader portfolio strategies. About 84% of insurers expect to diversify further, with private market allocations projected to rise from 20% to 36% within five years. Such investments generate more complex, less standardised data, adding to operational strain.

In response, insurers are rethinking workforce structures and operational processes. Many are hiring additional risk specialists, investing in digital tools, reducing reliance on manual spreadsheet workflows, and outsourcing routine operational tasks to improve efficiency.

Clearwater Analytics observed that insurers are becoming more confident in external managers, particularly for complex and alternative assets, as technology enhances transparency. Yet, managing fragmented and voluminous data flows remains a central challenge as outsourcing continues to grow.

Singapore Insurers: Outsourcing and Data Overview

Overall, Singaporean insurers face a complex balancing act: maximising the benefits of external expertise while ensuring robust control over increasingly large and fragmented datasets. Strategic adoption of technology, workforce planning, and process optimisation are emerging as critical levers for maintaining operational resilience in this evolving environment.