Northern Trust sees increased custody demand from insurance clients

One of its newest clients is Grange Insurance of Columbus, Ohio, which mandated Northern Trust to provide global custody for its $2.5 billion of assets.

By Joe Parsons

Northern Trust has onboarded 22 insurance clients with approximately $65 billion in assets over the past two years, showing an increase in demand for custody and accounting outsourcing.

One of its newest clients is Grange Insurance of Columbus, Ohio, which appointed Northern Trust to provide global custody and insurance investment accounting services for its $2.5 billion of assets.

“As insurance companies face increasing complexity in their investment mix and reporting requirements, we are seeing more interest in outsourcing back- and middle-office operations along with global custody and insurance accounting,” said Chris Dvorak, head of Insurance Solutions at Northern Trust.

“Outsourcing these functions to a provider that can perform them more efficiently and cost-effectively allows the insurance company to focus on its core business and spend more time providing its customers with excellent service.”

Mandates for new insurance clients over the past two years include asset servicing, accounting, investment operations, asset management and capital markets support for insurance general account and pension assets.

Dvorak added insurance companies are turning to outsourcing as many are now reaching the limits of their technology and operations platforms.

“[They] need to partner with service provides with the tools, talent and global strength to support their future growth,” said Dvorak.

“With services that allow clients to quickly take on new asset types, such as private equity, hedge funds and other alternative investments… Northern Trust’s focus on the needs of insurance companies continues to resonate in the marketplace.”